9 Steps to open a hotel business in Malaysia
9 Steps to open a hotel business in Malaysia

9 Steps to open a hotel business in Malaysia


Do you know the necessary steps to open a hotel business? If you are opening a hotel, there are several things that you must be careful about. First and foremost, you need to keep up with the new hotel industry trends. The truth is that opening a new hotel is challenging, as there are many things you need to take care of.
One of the most demanding phases is the pre-opening of the hotel. When you hire an expert hotel consultant, you will have the help you need to choose an efficient prioritization strategy to design a hotel opening plan.
There are many factors, such as marketing and distribution that you need to plan during the pre-opening phase. Keep in mind that in each step of the plan, you can encounter many obstacles as well.

A hotel is a commercial property where travelers who need room to spend the night pay a fee to stay there. Last year, the hotel industry generated under $200 billion in revenue. There are four main things you need to consider before attempting to open a hotel:
  • You have the capital or access to financing
  • You have limited hotel experience
  • You have realistic expectations. You know opening a hotel is not a rich-quick scheme.
  • If this is your first hotel and you don’t have real estate development experience, your best option is to acquire an existing hotel.
If you are inexperienced with the hotel industry, the wiser decision you can make is to hire a professional hotel consultant that can give you the expertise to build a reliable business.
“A hotel consultant will take care of everything that needs to be done to open the hotel.”
Having a professional team by your side with outstanding experience in operations, marketing, and financing could increase your ROI and revenue from the beginning. To open a hotel, you must follow nine steps.

The first step is to develop your business plan. Your business plan should describe how you are going to achieve your goals. Business plans are not only essential to attract investment but also to keep you on track moving forward. Even though no two business plans are the same, they all cover the same areas, including:
  • Products and services. Here, you will describe the products and services your hotel will offer. Don’t forget to include:
    • Prices
    • Benefits to the consumer
  • Market analysis. This part will talk about the competition, including:
    • Strengths
    • Weaknesses
  • Marketing strategy. This area explains how your hotel will attract and keep its customer. You need to describe a straightforward distribution channel.
  • Financial planning. This part is crucial as it where you include all your financial statements, balance sheets, and other vital financial information. You should include your goals for the first few years. The idea is to attract investors and lenders.
  • Budget. Any new business needs to have a budget. It should include:
    • Staff
    • Development
    • Manufacturing
    • Marketing
    • Any other expenses related to the business
If you are considering opening a hotel, you should know that the costs to get started can be considerable. Some of the most expensive costs include:
  • Land
  • Equipment
  • Furniture
  • Licences and Permits
So you should expect a meaningful investment to get started. It is challenging to give an industry average since the costs range extensively on the price of the property and the type of construction you preferred.
Besides the opening costs, you should consider the ongoing expenses for a hotel business. These costs include:
  • Facility maintenance
  • Salaries
  • Advertising
  • Insurance
  • Office supplies
  • Utilities
  • High-speed internet
  • Cable TV
Besides, you should expect to spend hundreds of dollars per month, replacing beds, furniture, mattresses, shower curtains, carpets, etc. How much money you pay will depend on the number of rooms your hotel has and the quality.
It is essential to establish an FF&E Reserve. An FF&E Reserve is a replacement fund that should be set aside for the periodic replacement of hotel components, like furniture, fittings, and equipment that wear out quicker than the hotel.
Establishing this fund can be challenging, as it is hard to calculate how much you will need. The good news is that IHCS Consulting Service can help you set the right amount for your needs.
“Remember, a successful hotel project should include both FF&E and OS&E.”
Another high cost is staff salaries and wages. Employees can earn between:
  • Low-level employees – RM2000++ per month
  • Hotel professionals such as manager, accountant, marketing professionals – RM 12,000++ per month
  • Maintenance team – RM4280 per month
For office supplies, you can budget RM200 to RM400 per month, and the cost of high-speed internet and TV cables throughout the hotel is about RM600 to RM1200 per month.
The main job of a hotel is to offer a room to spend the night to any person looking for one. It doesn’t matter if the person is coming from overseas or across the street.
However, to run a successful hotel business, you need to create your target demographic customer. Once you know who your target customer is, you will know which amenities to include and the hotel’s location.
As an entrepreneur, you might be wondering, “How does a hotel business make money?”  The answer is simple; with the profits of the hotel. An excellent strategy is to pay yourself an amount per year and then invest your earnings into the property.
How much you can charge will depend on the type of hotel you have. Keep in mind that the average price for a hotel room is around RM170 a room. Your price strategy should be based on demand.
“During the high season (holidays and summer), the hotel room can increase, so always set your prices on what people are willing to pay.”
Creating a price strategy to increase revenue can be challenging. You should consult IHCS Consulting Service as they have the expertise to help you run a successful business.
If you want to make your venture more cost-effective, consider expanding, and even creating a franchise. Hotel consultant can help you succeed in a competitive industry, so contact them if you want to increase your earnings and grow your business.
Choosing the right name for your hotel is critical. Recommends you to follow these rules:
  • Pick a name that is meaningful to your hotel
  • Try not to change your hotel name once you open. Remember, your hotel name could give you a competitive edge over similar hotels in your area
  • Avoid Long Names
It is a wiser strategy to choose a business name that is available as a web domain, as you will need to promote your hotel online to be successful.
One of the first steps to open a hotel is to establish a legal business entity such as an LLC. A limited liability company (LLC) is a business form that can protect you from being personally liable for your hotel debts or liabilities. Other business structures include sole proprietorship, partnership, and corporation.
Before you establish a business structure, make sure to talk with a hotel consultant as each structure has different tax, income, and liability implications for business owners.
Before you can open your hotel, you will need to obtain the necessary permits and licences. If you fail to obey, it can result in substantial fines, or even cause your hotel to be closed.
IHCS Consulting Services works worldwide, so make sure to consult them as they know what types of permits and licences are required in your country.
This is one of the key steps to open a hotel business. Whether you are running a 5-star hotel or bed and breakfast, your hotel business is not exempt from risks. It is crucial to protect your business and guests with hotel insurance.
You have to keep in mind that the hospitality industry faces high profile lawsuits each year. Protect yourself and your business with a proper insurance policy.
If you want your hotel business to be successful, you need to create your web strategy. You need to build your website and have a presence on major social media platforms such as Facebook, Instagram, Pinterest, LinkedIn, and Twitter.
Having an online strategy is vital to promote and market your business and to keep customers coming back. Besides, it will help you define a strong brand, which is key to be profitable.
In keeping with the new hotel industry trends. It's time to plan to make your hotel equipment more perfect in Malaysia. Please contact us immediately to get a free customized quote.

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Published : 12-Jan-2021

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