How to Build a Hotel Chain

Now that you know how to build a local market base, how online hotel distribution works and how to manage and price your hotel rooms online, we are going to talk about how to build and run a hotel chain.

Why do you want to build a hotel chain?
Maybe you and your family have two or more hotels and you want to put your name on them, or you want to create a brand with your own unique service. The first thing you need to consider with the harshest sense of self examination is—why do you want to?

If it’s about money, you will likely fail. There is always someone with more money and power than you. You need a burning mission to do it.

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Well, I had one. I started working in a 44-room family motel when I was 8 years old. We were on U.S. Interstate 90 in Wallace, Idaho—a small, Wild Western-esque silver mining town with gambling, bordellos, and nonstop excitement. Since the highway went right by the front door, we always had a consistent stream of business, and my early life was a constant circus of traveling salesmen, truckers, mining millionaires, hoboes, and bordello queens.

But in the 1990s, the U.S. government decided to build a bypass around the town, and our business disappeared overnight. So, my family built a 63-room Best Western on the highway exit, and we thought that would help. But it didn’t. Now we struggled to fill two hotels instead of just the one.

In November of 2000, I was at the Best Western convention in Honolulu, sitting at the back of a convention center filled with thousands of hotel owners at a town hall event. One of the owners who went up to the microphone said, “Wouldn’t it be great if someone would start a hotel chain where owners paid only based on the business they received?”

A couple of years later, my wife Melissa and I started Magnuson Hotels with a mission: To help hotel owners access global marketing power by paying only for the reservations delivered, and encouraging uniqueness instead of standardization. And because we had been through the struggle as small business owners, our mission was driven daily by our duty to help the family business in creating something bigger.

So if you have a personal mission, you already are halfway there.

The hardest part is getting started.
Lots of great ideas never get off the runway, so get started today with the essential 5 Ps of marketing.

  • Product. What is my product, and how will I differentiate? You don’t need expensive market research, just ask a few people.
  • Positioning. What is unique about it? No matter what you are, you can always create a differentiation, even if your hotels are economy-priced with only singles/doubles and furniture you bought online. Play up your locations. You could be known as the brand with the cleanest economy-priced hotels close to hospitals, courthouses, or city centers. Differentiation is everything!
  • Are you low-, medium- or high-priced? Keep it simple, and rather than go cheap for business, add more value such as a “to-go” free breakfast for the road.
  • Placement/distribution. You have to use all the major online channels as much as possible so you can be bookable everywhere in the world. Many hoteliers complain about the cost of OTAs like Expedia, but they are your best friends. Nothing is more expensive than an empty room.
  • Promotions/marketing. Partner with all local business organizations such as chambers of commerce and convention and visitors bureaus. When nonprofits hold auctions, always donate free rooms and packages at your hotels. Offer rooms whenever there are local emergencies such as when people are displaced by a fire or flood.
  • Brand. Keep the name short so people can remember it. Be clear on who and what does your chain stand for? Start with the heart, leverage your friendliness and service, and then add the nice touches. The things you stand for are the things that will be remembered and last forever; trendy colors and furniture will not.
  • Time management.
    One of the most important elements of success is knowing how to manage your time effectively. Entrepreneurs never have enough money or time, but time is more important because you can’t borrow more when you run out.

    It’s just not true that you need to work 70 hours a week to become successful. Make a list each night and prioritize for the next day, week, and month. Start each day with the worst item, such as a bad news call you’ve been avoiding. Then do the one or two tasks that are company-moving. Focus on projects by priority and turn off your email alerts. Do emails in fast blocks a few times per day, as checking email is not a revenue producing activity.

    Are you willing to work for nothing but satisfaction, with a payday down the road? Entrepreneurism consumes you and never lets go. And when it goes well, there’s nothing like it on earth. And as for people who tell you what you can’t do? Stand tall for what you believe in; you will never regret going big.

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