How to open a hotel business – lessons learned from hilton and ritz

How to Open a Hotel Business – Lessons Learned From Hilton and Ritz

When starting a hotel business consider the life and lessons of some of the greatest hoteliers as a source of inspiration. Here are a couple of lessons culled from the lives of two of the most successful hotel entrepreneurs, Conrad Hilton and Cesar Ritz.  

Conrad Hilton  

Hilton, born on Christmas Day, 1887, began his career in the legislature of New Mexico, his home state. He served in World War I and started his first inn in New Mexico. He subsequently began buying and starting hotels throughout Texas. Hilton’s hotel empire survived losses in the Great Depression and went international after World War II. Hilton was associated with generous charitable giving, but was a shrewd businessman.  

Hilton is quoted as giving an extremely practical piece of advice to hoteliers: “If you are 100% occupied, you are not charging enough rent.” This statement runs against the intuition of a new hotel owner to focus on renting every possible room on every possible night because a room that goes unrented will mean revenue lost forever.   Hilton recognized that if you reach that point of 100% occupancy, you are actually losing money. Additional guests are being turned away and the guests in your rooms would have been willing to pay more. Take his advice and seek to maximize revenue per available room and not the occupancy rate of your hotel. Make sure you are spending as much time or resources thinking about pricing as you are about booking guests. Yield management systems with careful monitoring can assist with this.  

Cesar Ritz  

Ritz was born in the Goms Valley in Switzerland in 1850, the son of a mountain farmer. He learned the hospitality industry from the bottom up, first waitering at a luxury hotel while in his 20s. He went on to become the restaurant-manager of a hotel and built a reputation as having a knack for entertaining kings and diplomats. He bought and opened numerous hotels before his crowning achievement, the Hotel Ritz Paris.   Cesar Ritz opened the Hotel Ritz Paris in 1898 with a celebration.

Isn’t the opening of your hotel worthy of celebration? Your hotel may not be as ostentatious as the Hotel Ritz, but it will have an important impact for both the staff you employ and the community it will become part of. Hotels build the capacity of a community for tourism and business and can have an extremely positive economic impact. Find a way to celebrate this opening to build relationships for the future. Use the opportunity to invite members of local government, the tourism board, partnering and neighboring businesses, and even other hotels (if they are ever booked up on a given night, wouldn’t you like them to refer their customers to your hotel?) so that they can all learn about the services your hotel will offer and see the kind of hospitality your hotel will offer first-hand.

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