Building a hotel is a significant decision due to the substantial investment involved. It becomes a major gamble if the decision to build a hotel is not preceded by a process of ensuring the investment's potential returns.
The success of a hotel is influenced by various key factors, and location is one of them. Choosing the right location greatly impacts the future success of a hotel once it is operational. Conversely, making a mistake in selecting an inappropriate location can lead to failure right from the start.
The biggest question is how to determine if a location is suitable for a hotel? How can one know if a hotel built in that location will be successful once completed and operational?
To evaluate whether a location is suitable for a hotel, it is necessary to consider its market potential. It should be understood that the hotel market fundamentally consists of two main segments: the leisure market and the business market. A location with potential in the leisure market will attract hotel guests motivated by tourism, while a location with potential in the business market will attract guests engaged in business or official activities.
Tourism activities are greatly influenced by the presence of tourist destinations in the area surrounding the location. The closer the hotel is to the center of these tourist destinations in the area, the better. However, it should also be noted that a location dependent on the tourism market will see its guests influenced by the timing of vacations and weekends.
On the other hand, a hotel location relying on business activities will be significantly influenced by the business developments around it. These activities can originate from the private sector or government. The closer the hotel is to business activities, typically in city centers, the better. A hotel location with potential business guests will be busier on weekdays rather than during holiday seasons.
The best location is one that has potential in both tourism and business markets. An ideal example of a hotel that combines both is a hotel located in the center of Paris, France. Paris is not only a business hub but also a global tourist destination.
Below is a checklist of key questions to assess the potential of a hotel location:
7 Basic Questions to Assess the Potential of a Location for a Hotel
1. Are there tourism market guests available for a hotel in that location?
2. Are there business market guests available for a hotel in that location?
3. Is there adequate ground, sea, and air transportation infrastructure to the location?
4. Is the domestic market available?
5. Is the international market available?
6. Has the area around the hotel location already developed?
7. Are there already hotels in the area where one is planned to be built?
If the majority of the above questions are answered with "YES," then the location can be said to have good potential.
About Writer :
Ojahan Oppusunggu : Former Technical PM – DTS ACCOR Indonesia & Malaysia, Former CTO of Topotels Hotels & Resorts, Former Director of Technical & Technology of Artotel Group and Currently as Project Director/Owner Rep. Kapuk Hills Hotel Jakarta – Handwritten Collection
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