What? Now is a good time to open up a hotel?! Are you insane, man? What about the ongoing pandemic? Or travel restrictions? This is the stupidest idea I’ve ever heard!
These are just a few of the responses you will get if you were to recommend someone today, in the midst of the Coronavirus pandemic, to open up a hotel. But hear me out first, what I will put forward may not convince you to actually open a hotel – it requires a lot of capital, time and resources amongst other things – but it would give you a different perspective when analysing things. And who knows, maybe someone reading this will actually start their own hotel and give credit to this article. Below are a few points as to why now would be a good time to open a hotel.
1) Interest rates are at an all-time low
When interest rates are really low – we’re talking at almost 0% – it is almost pointless to keep your money in a savings account as it will likely be worth less the next year due to inflation. This is usually the government’s way of encouraging loans to be taken out in order to get more money circulating and the economy in general going. This means there is almost no better time to take out a loan for your business as the fixed interest rates for repayment will be almost nothing!
Starting a hotel of any size is costly, but if you can almost eliminate the cost of interest on a loan, there may not be a better time. Consider searching for investors to join forces with to share the burden with and possibly provide expertise. In terms of acquiring finance to start a business, there is no better time than now. Cheaper financing usually results in an increased amount taken by loanees and this could fund more modern upgrades to hotels such as room booking systems, better websites and new furnishings – things that could be deal breakers for potential guests.
2) More people are being vaccinated
With more and more people being vaccinated around the world, economies are slowly opening up and there is more freedom to travel. While there are still precautions being taken in most places, improved vaccine rates have shown to lower the number of Covid related hospitalisations. Hotels are, and will play for the foreseeable future, an essential role in the travel and tourism industry and countries’ economies as a whole. The risk of travelling is reduced with vaccination and this is all positive news for the hotel industry.
3) There is a global urge to travel again
Tying in with the last point, having had movement restricted for over a year, many people are getting the itch to travel, and this means they need places to stay. Unfortunately, during the pandemic many businesses, including hotels, were forced to close. Hotels on the whole offer more efficient housekeeping services than for example, AirBnb’s – a real advantage in the minds of wary guests coming off over a year of restrictions. Reduced accommodation options and rising travel will inevitably lead to a shortage of accommodation when travel hits pre-pandemic levels again – and it will. Opening a hotel now will give you time to grow accustomed to the “new normal”, without the intense pressure of peak seasons yet.
4) Talent is easier to find
The pandemic saw many employees in the hospitality industry lose their jobs and many of them are still jobless. Starting a hotel at this time would give you a good pool of talent to choose from, giving your hotel a good chance of success from the get-go. Even if you are slightly inexperienced in the industry, having a good team working with you who are experienced is essential.