How to Start a Small Hotel business in India

If you are interested in the hotel industry, then it is the apt time to step foot into the Indian hospitality sector
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

  • |
  • Dec 05,2020
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  • 13 Mins Read

The rich Indian heritage has attracted thousands of visitors across the world. This has consequently resulted in a surge of the tourism and hospitality sector. However, the thing has changed with the onset of the pandemic. 

According to a survey by JLL, over 60 per cent of respondents (hotel operators) have up to 10 per cent of their total hotels serving as quarantine facilities predominantly in key markets, with some of these hotels providing rooms for the ‘Vande Bharat Mission’. Luxury Hotel Operators shut down a higher percentage of hotels, as very few of them were being used as quarantine or medical support facilities until mid June 2020. 

While international tourists have massively reduced, local tourists have begun opting for leisure destinations. After lifting the lockdown, people chose to visit hill stations and other holiday destinations within India. This has given a boost to the shrinking hotel industry. If you are interested in the hotel industry, then it is the apt time to step foot into it.  

Here is a step-by-step process to start a hotel business in India. 


Location is the prime deciding factor while establishing a hotel business. You have to ascertain a location which is close to popular tourist destinations. Further, the location should render all necessary facilities such as food restaurants, shopping plazas, cafes, and traditional markets etc. 

Your chosen hotel location has to be close to the airport, railway stations and bus stations. This will enable smooth travel for tourists and enhance their experience. 


After picking out a location for hotel business, the next thing involves searching the amount of area needed for it. Depending on your business’ capability, decide an estimated area that would be converted into a hotel. 

If you think of starting a small scale hotel business and provide shelter to 20-30 tourists at a time, then having 300 square meter of area is apt. While, for more occupancy, you can accordingly increase the area of land.  


After working on land, you have to bring attention to the hotel's interior. The interior should be embellished as per the latest trends. It should neither be too bright nor dull; the color theme should go along with furniture and fittings. 

If you do not possess skills in decorating hotel’s interior, then consult an interior designer. Inform the designer what your preferences and budget is and he will ensure decorating the hotel in the decided budget. 

Research The Market 

Before settling down in a particular location, you have to study the market around the hotel. Firstly, you have to understand the kind of competition that prevails in your surroundings. Secondly, after considering the gathered information, you have to build a business plan and add on facilities to entice tourists. 

Creating a business plan and strategy are immensely important. It will help evaluate problems before they actually surface. Further, your hotel business would be prepared to leap over those obstacles. 


Once all things are sorted, you can figure out as to how to build your hotel business. However, to realise this dream, you would require a hefty amount of capital. For this, you have to take out your savings or take an external aid. You can reach your friends and family members. Approaching a bank and presenting your proposal to open up a hotel business would be apt. 

The bank can roll out a loan depending on your business’ needs. It may take some time to get the loan considering the long documentation process. However, you need not lose hope and prefer this option over others.

For creating a hotel business in India, you have to follow these steps. There can be other additional steps depending on varying locations. You know those steps, then share with us in the comment section below.

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