In the following article, I am going to share with you how I was able to launch my own 4-star boutique hotel in 90 days:
I’ll start by saying that this wasn’t something that I just woke up and decided to do. I had been planning and preparing for this for over a year says Saivian. But if you’re motivated and willing to put in the work, then you can definitely achieve something similar in a shorter time frame.
So without further ado, let’s get into it.
The Idea:
The idea for my hotel actually came about from a previous business venture that I had started. At the time, I was running a small marketing agency and we were working on a project for a large hotel chain says Saivian.
During the project, we got to see how many of these hotels were run and I noticed that there was a huge problem with their distribution strategy. They had an abundance of 4-star boutique properties in major cities across the United States but they weren’t doing anything to market them properly, which meant that most guests weren’t even aware that these hotels existed.
They just lumped their entire inventory into one site and didn’t differentiate between the properties. This meant that no matter which city you searched in, you were going to come up with hundreds or even thousands of different locations where you could potentially stay. And when it came down to booking your room for a given night, chances are you would choose the property that was closest to your destination as opposed to the one that would be best for you.
These were all 4-star properties and yet because of poor distribution, they’re not receiving anywhere near enough bookings to justify their existence, which is why they’re always struggling for money.
That’s when I realized that if they let me take over management of these boutique hotels then I could fix this problem with very little upfront investment.
There are plenty of major cities across America with only a handful of 4-star boutique hotels serving them where there is high demand due to tourism or local business travelers who need decent accommodations at a reasonable price point. If I was able to convert some of these failing locations into profitable businesses by simply changing their distribution strategy, then I could have a nice little business on my hands.
And the best part is that all of this can be done without ever stepping foot inside any of these hotels. All you need to do is find them, purchase them and manage them remotely from the comfort of your own home.
After reviewing hundreds of properties across America, I found one that was pretty good and priced at just under $1 million dollars. It’s located in a major metro area and has over 70 bookable rooms (including suites). When I first saw it, there were absolutely zero reviews on Trip Advisor or Google Maps and yet it had decent rates for what it offered – much better than the alternative options nearby. This meant there were very little competition and a lot of potential for growth.
The Execution:
After finding the right property, the next step was to actually purchase it. This is where a lot of people can get stuck because they don’t have the money to buy a property outright. But fortunately, I had been saving up for this exact purpose and I was able to purchase the hotel with cash explains Saivian.
Once the property was mine, I began the process of renovating it in order to bring it up to my standards. This took about 2 months and cost me an additional $100,000.
But even if you don’t have the money to renovate. You can still do a lot with just a fresh coat of paint and some new furniture. In fact, hotels are almost always willing to pay for a makeover. If it means that the property will become profitable. And if they won’t pay for it, you can use their renovation money. To offset your own costs and actually come out ahead.
Once everything was finally ready to go, I began running an aggressive marketing campaign on Google Ad words using geo-targeting. This allows me to only show ads for this hotel. To people who live in or around the city where it’s located – which is exactly what I wanted says Saivian. Within a week, there were already over 1,000 reviews on Trip Advisor. As well as multiple positive reviews from bloggers and magazines. The business was now receiving bookings from all across North America and after just a few months. I was able to start turning a profit.
Conclusion
If you have all of these things, then starting a boutique hotel management company is definitely something worth considering. It’s a great way to make passive income while also helping out struggling businesses in your local community.