5 Aspects that Influence the Success of a Hotel Investment

You can use all the best property valuation software to make your decision, whether to invest in a hotel or not, but it will take more than software to understand the market and make a good judgement. Those who are in the hotel investment business have been in it for many years. For anyone considering this type of investment, help from the professionals in the industry is an absolute must. At the same time, you will need to do your own research. You will need to understand so many issues, from the global economy, big-name brands, how to choose the right specialist, the legal implications of your investment in another country, and a whole lot more. For now, let’s take a look at some of the essentials that makes a hotel successful, and therefore, what makes your investment provide good returns.

  • Location. It is hard to imagine a hotel being successful if it is in the middle of an industrial area, or the country has an internal conflict without end. Location means more than just where the hotel is. Location includes local transport features, facilities like golf courses, weather and climate and support from local governments.
  • Facilities. The hotel itself needs the features and facilities the market demands. Conferences are a big reason why many hotels can exist. If they don’t have the facilities, they will not get the business. Features are extremely important for hotel success.
  • Brand and Presence. The best hotels have the best management. We know brand names because we have been exposed to those names. If you want to know whether a hotel brand is important, all you need to do is look at the media presence. Media presence also includes online presence. Online hotel booking is so important, online media presence has become more important than tradition media in the hotel business.
  • Tourism. There are not too many people that will choose a location based on a hotel. They choose the hotel because they want to go there. Tourism is a fickle business. People go to a destination because of a number of reasons. An airline could be offering better deals, or the country could be offering tax free incentives for shoppers. Tourism is a combination of factors. Dubai is the perfect example, everyone has an image of the Emirate, but in reality, the place is one huge desert with a large amount of construction. There is little like you will see in the postcards.
  • Economy. Shanghai is the perfect example of where economy meets hotel. For the last few years, hotel construction has been ballistic. Shanghai, while not the capital of China, is the commercial hub of China. It is not tourism driving the hotel construction in Shanghai, it is the potential business that will happen between China and the rest of the world. The economy in China is much better than in many countries in the world. The world has been flocking to China for some time, and when the world hit the global crisis of recent, China was a safe haven.

Traditionally, hotel occupancy has followed the flow and ebb of the economy. Now we are living in an increasingly global economy, and so those distinctions are getting blurred.

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