Current blog is fully dedicated to a startup guide for establishing a hotel business in India. If you are interested in starting one you must read the current blog till its last line. It will help you out to know about the key elements of starting a hotel business in India. To start a hotel in India may seem easy to you but trust me it’s really tricky to establish a legal hotel business. There are a lot of licenses, permits and registrations which one needs to obtain. Failure to comply with them may lead to fines and penalties, hence you must start this business with the help of an expert who may have experience in the same field.
Types of Hotel Business Models in India
There are many ways through which you can start a hotel in India, out of which some common hotel business models are given below:
Management Agreement Hotel Business
This is the hotel business where the owner of the business enters into a management agreement with the management company which looks after the hotel business of the owner. Here all the business activities are looked after by the management company against which they took management fees from the owner. That fee can be in the form of money or percentage in the revenue of the business. One can choose this to start a hotel in India.
Franchise Agreement Hotel Business
Here one starts the business by entering into a franchise agreement with the already established hotel business. These are basically the franchises of the already established brand, which is famous among the people. Here you indirectly help the other party to expand their business. Here your business is not on your name it is on somebody else’s name and growing on the name of that other person only. Here you need to pay the fees to the actual owner whose franchise you want to open.
Owner Operated Hotel Business
This is the best form of the hotel business. Here all the control of the hotel is in the hands of the actual owner of the business. Here all the things are in the hands of the owner and all the important decisions have been taken by the owner itself. Either there is loss or profit, the owner is going to bear the same.
Leased Hotel Business
One of the most important aspects to start a hotel business in India is land to build the place. If you are having less investment and you find it difficult to buy the land for the same purpose, you don’t need to worry because you can start the leased hotel business. In this type of hotel business you took land on lease for a long period of time. In this way you can start your own business without having your own land.
Important Points to Remember to Start a Hotel in India
Some of the key elements to start a hotel in India re discussed below:
Market Research
Proper and deep market research is very necessary in order to start a hotel in India. Already there is a lot of competition in this business industry and in such a competition if you enter without preparation you are definitely going to fail. Hence before actually entering into this business you must do through market research regarding the same.
Proper Investment Model
To start a hotel in India, the very first thing you need is investment. Either you want to start a small hotel or a giant one, for both of them you need a good amount of investment. There are two types of investment generally, first is self funded and second is through investors. Now it’s up to you which one you prefer.
Swot Analysis of the Business
It’s really important to do a swot analysis of the business before starting the same. Swot analysis means deep analysis like who are the competitors of the business, turkey customers, market analysis. Investment plan, opportunities, weaknesses, strengths of the business etc. this will help you out to stand differently in the business industry.
Location of the Business
There are a lot of people or business owners who choose the location of the business randomly without doing research about the same. This is because they think that location is not that important. Maybe in other businesses location does not matter but in the hotel industry location really matters. Hence you must choose the location of the business very carefully. A good location is really important to start a hotel in India.
Key Required Licenses and Permits for Hotel Businesses
As mentioned in the introduction, there are many legal licenses and permits one needs to obtain in order to start a hotel in India. Some of the general license and permits one needs to obtain are mentioned below for your reference:
- No objection certificate or NOC from the Ministry of Tourism is required to start a hotel business in India
- Premises or building permit is required as per the local law where the hotel business is going to start
- Fire safety permit is the key requirement of the hotel business for the fire safety
- In hotels from time to time different types of events are organized hence for the same you need to take a license which is known as Public Performance License.
- Eating house license is the next important requirement of the hotel business hence you must obtain the same as a business owner
- Signage as well as police license is also necessary for doing hotel business in India.
- Health safety license with the trade license must be obtained
- FSSAI License registration is an unavoidable license for the hotel business in India
- GST registration if applicable on your business
- Shop and establishment certification as per the respective state’s shop act
- MSME registration should be obtained to take various advantages
- Bar license as well as the environment clearance must be obtained by the business owner
Conclusion
Government is extra conscious about these hotel businesses, because this business is directly related to the food as in hotels food is going to serve the general public and the government is very strict about food safety. Hence one must start a hotel in India with extra care and caution so that they do not need to face any huddle and the business can run easily. In order to make your hotel business successful you must establish it by following all the legal requirements. It will make your business strong and it will easily survive in the tough competition in the market. If you want to take a startup guide you can contact us. We will help you out to establish your hotel business.
