Hotels are a key player in the travel and tourism industry, not just in the U.S. but all over the world. Each year, tourism generates about $1.4 trillion in revenue and after rising from the decline in the last decade, there’s a concerted effort to make the industry even bigger. Hotels and motels are expanding or renovating to make room for more guests and amenities.
It’s good that it’s relatively easy to secure a business loan for hotels or similar establishments. Financial institutions have seen the potential for growth in the industry and are more than willing to infuse fresh capital.
With the continuous growth, the industry is experiencing right now, you have all the reasons to expand your business. You can renovate your facility to accommodate more guests or put up a few more branches. A business loan would be of great help. Here’s what you need to get hotel financing:
Proof of Profitability or Feasibility
Any business plan includes a feasibility study or proof of profitability. Banks and other lending institutions will think twice before lending you money if you don’t have this requirement. Since you can use a hotel loan to buy land, an establishment, furnishings, or equipment – you need to know and declare if the expansion would be profitable.
If you are buying land, the location has to be in a prime area or where there is good foot traffic. You can justify the need for the loan and explain that it will be for expansion, re-designing, or for purchasing new equipment for the kitchen or rooms. These improvements are necessary to remain competitive and to increase the number of guests in your hotel not only during peak season, but also during the lean months.
Prepare a Marketing Plan
Smaller or lesser-known hotels also need a marketing plan to promote their brand and service to more people. The big name hotels are seen on ads and promotions everywhere, while the smaller ones compete for a small space on the market. If you’re borrowing money for your business, you need to provide a marketing plan to show that you have solid campaigns to grow your business. You must convince lenders that you will be capable of paying back the money you borrowed.
There are plenty of improvements that you can do for your hotel. You can replace the beds, add tubs, buy new carpets, or get new mini refrigerators for the rooms. The possibilities are endless and it’s best to take advantage of the many loan options at your disposal.