Tips for starting a holiday rental business – Find villas in Sri Lanka for sale
With the tourism industry picking up speed in The Pearl of the Indian Ocean, villas in Sri Lanka for sale have begun to attract the attention of international investors. The time is right for ventures such as holiday rentals. The potential success of your business depends on your preparedness, market research and above all budgeting accuracy. Here is a simple guide to help you get started.
Determine your market segment
You are more likely to be able to run your holiday rental effectively if you have a specific target market and know how to cater to their needs. Depending on your location, find out what type of tourists are likely to frequent your hotel. For example, if you plan on taking in luxury seeking travellers, you should plan accordingly.
Once you know your demographic, start your market research. Make a list of hotels in the same area that cater to the same target audience. Make note of the average length of stay of guests, revenue per guest, cancellations, last minute bookings and no-show rates. Compare the strengths and weaknesses of other hotels to find out what you can offer to make your own signature brand.
Itemize the costs you will have to incur such as salaries for staff, maintenance cost, utilities, food, and internet operations. You can then predict your costs for the first year and make adjustments to offer something different to your clients. Then based on the rates of your competing hotels, project the occupancy rate for the first year. You can make adjustments based on your hotel?s quality level. Calculate the annual revenue.
Projected annual occupancy rate = no of rooms x daily rate x days you?ll be open
Afterwards, compare your projected income to your expenses. You should have ample cash reserves to cover your costs until the hotel starts to pay off.