Location is one of the top selection criteria for travellers when choosing a hotel. It is very important to stay objective in the hotel site selection process. It is very tempting to get carried away and look at everything through pink sunglasses, dreaming of your cool new hotel concept to become reality.
If the location doesn’t work out the way you thought, you won’t be able to meet your financial projections. That will bring your newly launched hotel business in all sorts of trouble. Your hotel literally stands or falls based on its location.
Hotel demand forecasting
We have to ask ourselves what the end user, the guest in this case, really wants. What will drive him/her to book a hotel? The following examples should give you an idea:
Proximity to hotel demand generating sources like: business areas, tourist attractions, industrial parks, colleges, hospitals, airports, major cross road for through traffic, etc.
Transportation connectivity: roads, taxi, metro, subway, buses, trains, walking, bicycle paths, etc.
Surrounding offering: restaurants, bars, shops, etc.
What does the location need to offer besides the hotel itself? How easy will it be to get to where they need to be? In short, you need to know which guest market segments you will target, and what their needs are. Does your location meet the need of these market segments?
Hotel site selection criteria
There are some important considerations you should keep in mind when choosing a location for a new hotel. We listed a few of them below:
• Does the zoning of the location allow a hotel? Or if it doesn’t can it be easily changed?
• Are utilities available at the site? Sewer, water, electric? Gas (optional)?
• Does the size of the land allow for enough rooms to be constructed to reach a healthy ROI?
• Can you buy or lease the building or land? And would the owner consider exchanging part in return for equity in the hotel business?
• How many hotel rooms currently exist in the area? Are the existing hotels successful?
• How many new hotels and rooms are planned for development in the immediate area?
There are a lot more things worth taking into consideration. These are enough to get you started for now.
Xotels is a hotel management company that focuses on improving revenue management for independent hotels and hotel chains. Visit our website for more information.
Author: Patrick Landman @ Xotels
Hotel Management Company - Xotels Ltd. 