Blogs / Hospitality Business
How to start a profitable guest house business in 3 simple steps?
Starting a guest house business sounds like an EXCITING task, but what if you go with your GUT and open a boutique property, then you would face 3 things -
This happens as they underestimate the importance of having a business plan, financial projections and marketing strategy.
That creates a financial burden on guest house owner.
Let's talk about what a guest house is, whether it is feasible for you to open one, and the exact four steps you need to follow to run such an accommodation.
A guest house is simply a small establishment where the property owner rents the property to travellers for a short- and long-term period. Unlike B&Bs, these lodging businesses are larger, but the owner of the property doesn't live there.
These accommodationscan range from standalone rooms to apartments and offer facilities such as clean bedrooms, appetizing cooking meals and alcoholic beverages.
The owners who run a guest house business don't have in-depth knowledge of hospitality management. But they have a good knack for cooking skills, know how to maintain clear hygiene and delight guests in the best possible way.
Travellers who want a relaxing environment on a short-term basis prefer to stay at a guest house.
Before starting a guest house business, here are a few questions you need to ask first -
They wanted to earn more revenue by giving the property on lease and management contracts to get more revenue share.
Starting a guest house business is an incredibly hard thing, and location plays a vital role in attracting tourists and vacationers. Here are a few steps on how you can run a successful guest house business-
Starting a guest house business from scratch is never a bed of roses; it requires you to have a business license which is costly affair but without which you can't operate your property.
Finding a right place also decides what type of travellers will visit your property. Are they leisure or business travellers?
Then you need to comply with certain health and safety regulations to ensure that you maintain that hygienic standard.
It all starts with finding the right property, which can be either purchasing a new property, buying an existing guest house business, or renovating the property.
Make sure to estimate the value of the property with earnings.
Does this existing property get more guest traction or not?
Does it get more occupancy during peak season, or are people aware of this property?
Downside? If the property has had a bad reputation in the market and people have left negative reviews on OTAs, that means your profits are going to suffer.
Keep in touch with the owner of the guest house and ask about the current cash flow that this property receives, is there any system set up, or what are the go-to operating expenses involved?
Ask him to provide you with training so you can know the ins and outs of this business.
Have limited funds?
Note – You always have to do homework in each of the 3 cases.
A good business plan is important for you to start a guest house business and ensure that you stay aligned with your core business goals.
Most guest house businesses don't create a business plan, which makes it difficult for investors to consider investing in your property.
Here are three things that you need to be clear about when drafting a business plan for your future guest house business-
To help you get started, here are a few things to include in your business plan -
In marketing, you need to see how many people are willing to pay for the services and how you will get in touch with them.
You finally launched your guest house business, but travellers don't know about you. Spread some buzz about its opening. Social media is one of the ways to share some cool stuff, exciting updates and behind-the-scenes moments.
Invest in your hotel's website so that people can reserve a room with ease. Provide the most important information to them so they know what they will get after reserving a spot at your accommodation.
Make sure to think about guests' safety, as that's a #1 priority for you since it's a client-centric industry. Keep your rooms ready and pamper your guests with unique experiences, such as a consistent theme and design everywhere or lip-smacking meals.
The cost of building a guest house depends on various factors such as -
Here are a few tips that you can follow to bring more guests to your property. These are as given below -
1. Know your guests inside out and be clear about who you want and who you don't want.
Not all guests can be treated as equal. You need to understand whether they are leisure travellers or vacationers, then you can know what amenities/services attract them most.
If you think of buying an existing guest house business, then you need to talk to existing guests who usually come to your area.
This way, you can tailor every message as per each guest's profile.
2. Keep communicating with guests regularly. The contact information should be clear on website and socials that they can find you.
3. List your property on different OTAs to ensure that you've a pipeline of guests coming to your property. Then, there will be money coming in. But don't heavily rely on OTAs, as they will take 25-30% commission of the total bookings.
4. The website is the first impression that travellers generally look for before they click on the book button. Keep your website SEO optimized so you rank at the top of SERP.
Make sure that the hotel's website matches the brand identity and should convey the features, popular things and USP that make your property stand out. Make sure to focus on the benefit side of things.
5. Travellers always read reviews before deciding on a place to visit. The number is significantly higher when they come to reserve a spot at the accommodation.
A study states that 81% guests read the reviews frequently before deciding to stay at a property.
6. Take feedback seriously. The positive feedback tells you you've been doing well in these things, while the negative feedback will tell you where you're lacking. This way, you can spot gaps and enhance the guest experience.
7. Make sure to keep your rooms tidy and clean before guests can spot the gaps and complain about room cleanliness. Such things become worse when they are highlighted in reviews.
8. Whenever people leave your guest house, ask them to share their reviews on OTAs and social media. This creates the first impression of your property, but if you have more negative scores, then that's a red flag for travellers.
Join groups on social media to find what travellers are struggling with most and create content on that topic consistently.
9. List your property on Airbnb and optimize it for better visibility.
This way, whenever a travelers runs searches for finding a suitable guest house, your property will be visible at the top.
To get more eyes on the guest house, write a compelling description and hire a professional photographer to capture the best photos.
10. Technology should always be at the forefront of running a guest house business.
11. Investing in hotel management software such as PMS, channel manager, and an SEO optimized website with a booking engine integration can take your small guest house business to the next level.
12. Guests aren't just interested in fancy bed linen or top-notch rating, they want-
Starting a guest house isn't a cakewalk, and it does not demand huge resources from your side; it requires your unconditional commitment, a place where unique experiences are shared.
Not every guest will look at 200 glossy reviews, of course, some of them will do their research carefully, but what if glossy reviews fade away when they enter your property?
No cleaners, Poor guest service, Bad location, where no one likes to come, with disappointed guests along the way.
This means you need to take care of every single element, from funding to deciding what goes inside your property, to how people will know about you.
To help you manage the hassle, you need to have a technology-first mindset, and BOTSHOT can help you manage your routine operations with ease.
| Sr. Technical Writer
Gurpreet Kaur is a content writer with firsthand experience in guest relations and hospitality service design. Her time in the hotel industry gives her a deep understanding of guest expectations, which she channels into content that promotes technology as a tool for better experiences. Gurpreet specializes in writing about contactless solutions, smart room technologies, and sustainable hospitality practices.