Recession or no recession, hotels may slump in business, but they never go out of style.

Get your hospitality quotient now! Choose the right location The land you purchase to build your hotel on should be situated in the city center and / or in a commercial, business zone with a good approach road. Visibility is of utmost importance to get business at your hotel. If you acquire land thats away from the city center, make sure it is well-connected to the hub of activity. Ideally, you should look to start with a 70- to 120-room property, which would require a land area between 10,000 to 60,000 square feet, depending on whether you are building a 3-star or 4-star property. If you are planning to start a 5-star hotel, the land area requirement can go up to 100,000 square feet for a 100-room hotel. The average room size should be 220-280 square feet. Hire a good architect & consultant Remember, while constructing your hotel, knowledge of the industry and its workings is essential. Hence, an architect, a consultant and the promoter must work together. Identify a qualified architect who has experience in hotel projects, someone who can understand the functionality of the business. The architect and the consultant will work in tandem; while the architect helps with the layout and the interior design plan of your hotel, the consultant will look into the finer elements of the business (such as room demographics, etc.). Benefits of Competency Profiling The hospitality industry is capital intensiveand there is no way out of that. Even if you plan on building a 3-star property, as opposed to a 5-star or a 5-star deluxe, very heavy expenditure would be involved. Moreover, most banks are not ready to give loans to a first-time hotelier, making it a risky venture. However, if you need a loan, nationalized banks are a better option than private banks. Make sure that 30 percent of the capital that you need to invest is your own money, and the balance is from the bank. The gestation period for this industry is a minimum of 15 years for a 3-star hotel, and 30 years for a 5-star hotel. Therefore, if you find a venture capitalist, theres nothing like ita bank loan will require you to start repaying from day one. Conceptualize The concept of your hotel is largely predefined by the city you will be setting it up in. If youre eyeing a metro city like Delhi, Mumbai or Bengaluru, you should consider setting up a business hotel or a boutique hotel, as opposed to setting up a leisure hotel in a tourist destination like Goa, Mysore or Jaipur. However, these days, comforts are the same for everyone. So, no matter what concept you decide upon, make sure you have a clean hotel that offers great service. Conduct a market survey This industry has just two kinds of customers: business travelers and tourists (domestic and international). Before you start building, it is advisable to hire an agency to conduct a market survey and check out the kind of businesses that are within 2-10 kms of your property. A professional agency will be able to establish the average market share within your radius, the spending powers and the lifestyle patterns of your potential clientele. Maintain competitive rates In todays environment, customers look for good rates first. When launching your property, peg yourself

slightly lower than the current market to get people used to your hotel. Gradually, depending on how well your business does, you can scale up the price point. On an average, 3- and 4-star hotels in metro cities should not be priced at more than Rs. 3,500-Rs. 4,500 per room. This segment is slated to see eminent growth, so focus here. Acquire licenses This industry requires 40-50 licenses to be supported by over 100 documents, most of which are renewed every year with a fee (and a bribe!). Some basic licenses are: Plan Sanctionissued by the local corporation of your city; a one time charge and application Restaurant and Lodging Licenseissued by the local corporation of your city, after a medical inspector has checked your premise for sanitation and safety standards Water and Sewage Licenseissued by the local corporation Pollution Control Board License Liquor LicenseCL-7 from Excise Department Public Performance License to play recorded music License for Live Performances License to install a lift License from the Department of Labor Classify your hotel The India Tourism Board is the governing body when it comes to rating your hotel as one, two, three, 4or 5-star. Though you pay more tax once rated, it builds on the credibility of your hotel as a certification and also helps in getting you a liquor license. It is advisable to run through the requirements for each rating before building your hotel. This way, you can plan your property accordingly with all standards and facilities in place before you apply for classification. Hire experienced staff Ideally, 60 percent of your staff should be experienced; the balance 40 percent can be freshers or semiskilled labor. If you are setting up a 5-star hotel, the best way to recruit people is through ads in the paper, social media sites, job portals, referrals or campus placements from hotel management colleges. Promote your property The first year is very crucial to the success of your business, and a large chunk of projected revenues should be allocated for promotional activities. Splash your name around town.

Quick Facts Domestic tourism in India: 550 million people International inbound tourism: 5.52 million people Margins in the hotel industry: 40-45 percent States to watch out for: Karnataka, Goa, Maharashtra and Kerala Employee: Hotel Room = 1:9 (4-star) & 1:6 (3-star) in 2008-2009 Average room rates: Bengaluru Rs. 9,757; Mumbai Rs. 6,822; Delhi NCR Rs. 6,087; Chennai Rs. 4,678; Goa Rs. 5,378 (in 2008-2009) Domestic business travelers: 36.6 per-cent (largest chunk) of the Indian hotel market