Motel Business Plan [Sample Template]

A motel business is a type of lodging establishment that provides short-term accommodations for travelers. The term “motel” is a combination of the words “motor” and “hotel,” indicating its original purpose to cater to travelers with automobiles.

Motels are typically located near highways, major roads, or tourist attractions, making them convenient for people on road trips or needing a place to stay for a night or two.

Motel businesses usually offer a range of rooms or units, often with parking spaces located directly in front of the rooms for easy access. The rooms in motels are designed to be functional and practical, often featuring basic amenities such as a bed, bathroom, and sometimes a small kitchenette.

Compared to traditional hotels, motels tend to be more affordable and focus on providing a convenient and cost-effective option for travelers who prioritize ease of access and budget-friendly accommodations.

Steps on How to Write a Motel Business Plan

1. Executive Summary

Green House® Motels, Inc. is a well-established and environmentally conscious motel business located in the vibrant city of Green Bay, Wisconsin. Our motel offers a unique blend of comfort, affordability, and sustainability, making us the preferred choice for travelers seeking a convenient and eco-friendly stay.

At Green House® Motels, Inc., we are committed to minimizing our environmental impact through energy-efficient practices, waste reduction, and sustainable amenities.

Our motel is strategically situated near major highways and attractions, making it an ideal stopover for both leisure and business travelers. We offer competitive rates without compromising on quality, ensuring that our guests receive exceptional value for their stay.

Our rooms feature modern conveniences such as Wi-Fi, flat-screen TVs, and comfortable bedding, enhancing the overall guest experience. From energy-saving lighting to eco-friendly toiletries, we prioritize sustainability throughout our operations to create a positive impact on the environment.

2. Company Profile

a. Our Products and Services

At Green House® Motels, Inc., we offer a range of rooms or units, often with parking spaces located directly in front of the rooms for easy access. We also offer upgraded facilities and services, including Wi-Fi, flat-screen TVs, in-room coffee makers, swimming pools, on-site restaurants, and other amenities to attract a wider range of travelers

b. Nature of the Business

Our motel business will operate the business-to-consumer model.

c. The Industry

Green House® Motels, Inc. will operate in the hospitality industry.

d. Mission Statement

To provide travelers with a comfortable and eco-conscious lodging experience that aligns with their values and budget.

e. Vision Statement

To become a leading example of sustainable hospitality in the region while offering exceptional service and value to our guests.

f. Our Tagline (Slogan)

Green House® Motels, Inc.: “ Stay Green, Stay Comfortable: Where Sustainability Meets Hospitality”

g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)

Green House® Motels, Inc. will be formed as a Limited Liability Company (LLC).

h. Our Organizational Structure

• Chief Executive Officer (Owner)
• Facility Manager
• Maintenance Officer
• Accountants/Cashiers
• Cooks (Chefs)
• Administrative Staff
• Cleaners

i. Ownership/Shareholder Structure and Board Members

• Peter Paulson (Owner and Chairman/Chief Executive Officer) 54 Percent Shares
• Kelvin Duplantis (Board Member) 16 Percent Shares
• Kyle Hanis (Board Member) 10 Percent Shares
• Teddy Moses (Board Member) 10 Percent Shares
• Juliet Murphy (Board Member and Secretary) 10 Percent Shares.

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   SWOT Analysis

a. Strength

• A strong commitment to eco-friendly practices and a sustainable approach differentiates Green House® Motels, Inc. from competitors.
• Strategically situated near highways and attractions, providing easy access for travelers passing through or visiting the city.
• Offering contemporary amenities such as Wi-Fi, flat-screen TVs, and comfortable bedding enhances the guest experience.
• Providing affordable accommodations while maintaining quality gives Green House® Motels, Inc. a competitive edge.

b. Weakness

• A relatively smaller marketing budget might impact visibility in a competitive hospitality market.
• A potential weakness is if there’s demand for a wider range of room types or sizes.
• Fluctuations in demand based on seasonal travel patterns might impact revenue consistency.

c. Opportunities

• Increasing eco-consciousness among travelers presents an opportunity for Green House® Motels, Inc. to tap into a niche market.
• Offering additional amenities like meeting spaces or partnerships with local eco-tourism activities could attract more guests.
• Investing in digital marketing and online booking systems can reach a broader audience and simplify the booking process.

i. How Big is the Industry?

In the United States, which has one of the largest motel markets, there are 166,272 hotel & motel businesses as of 2023, an increase of 7.1 percent from 2022. The market size, measured by revenue of the Hotels and motels industry was $224.9bn in 2022.

ii. Is the Industry Growing or Declining?

The motel industry was experiencing a mixed trend with both growth and challenges. The growth or decline of the motel industry can vary based on factors like economic conditions, travel trends, consumer preferences, and the specific location of motels.

iii. What are the Future Trends in the Industry?

The motel industry is evolving and experiencing several notable trends that shape its future. More motels were likely to focus on sustainability and eco-friendliness, incorporating energy-efficient technologies, waste reduction practices, and sustainable materials to attract environmentally conscious travelers.

Motels were expected to adopt advanced technologies such as mobile check-in/check-out, keyless entry, and smart room controls to enhance the guest experience and streamline operations.

Motels are likely to invest in data analytics to understand guest preferences better and deliver more personalized services, creating memorable experiences tailored to individual needs. Post-pandemic, health and safety protocols are expected to remain a priority, including enhanced cleaning practices, touchless interactions, and improved ventilation systems.

Motels could offer fitness facilities, wellness amenities, and healthy dining options to cater to travelers seeking wellness-focused stays. Establishing a strong online presence, utilizing social media platforms, and optimizing websites for mobile users could become essential for motels to attract and engage guests.

As remote work and “work from anywhere” trends continue, some motels might offer amenities like co-working spaces and high-speed internet to cater to business travelers and digital nomads. Motels might partner with local food and beverage providers to offer guests a taste of the region’s culinary offerings, enhancing the overall travel experience.

iv. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to the motel business because the motel is a niche idea in the hospitality industry.

v. Can You Sell a Franchise of Your Business in the Future?

Green House® Motels, Inc. intends to sell franchises in the near future, with a focus on major cities in the United States of America and Canada.

d. Threats

• Intense competition from other motels, hotels, and alternative accommodations in the area.
• Economic downturns or fluctuations could impact discretionary travel spending.
• Evolving environmental regulations and zoning laws might affect sustainability efforts or expansion plans.

i. Who are the Major Competitors?

• Motel 6
• Super 8
• Holiday Inn Express
• Best Western
• Quality Inn
• Travelodge
• Days Inn
• Red Roof Inn
• Rodeway Inn
• Howard Johnson
• Knights Inn
• Americas Best Value Inn
• Econo Lodge
• Ramada
• Baymont Inn & Suites
• SureStay
• La Quinta Inn & Suites
• Candlewood Suites
• Studio 6
• Tru by Hilton.

ii. Is There a Franchise for the Motel Business?

Yes, there are franchise opportunities for the motel business, and here are some of them:

• Motel 6
• Super 8
• Holiday Inn Express
• Best Western
• Quality Inn
• Days Inn
• Red Roof Inn
• Rodeway Inn
• Howard Johnson
• Econo Lodge.

iii. Are There Policies, Regulations, or Zoning Laws Affecting Motel Business?

Yes, there are various policies, regulations, and zoning laws that can affect the operation of motel businesses in the United States. These regulations are typically put in place by local, state, and federal government authorities to ensure safety, proper land use, and compliance with various standards.

Zoning laws dictate where certain types of businesses, including motels, can be located within a municipality or region. Zoning codes determine whether a motel can be established in a particular area, the size and appearance of the building, and other land-use considerations.

Motels must adhere to health and safety regulations to ensure the well-being of guests. This may include guidelines related to sanitation, food handling (if there’s an on-site restaurant), pool safety (if applicable), and general hygiene. Motels must comply with environmental regulations, particularly those related to waste disposal, hazardous materials handling, and energy efficiency.

Motels must comply with advertising and marketing regulations to ensure that their promotional materials are accurate and do not mislead potential guests. If a motel has an on-site bar or restaurant that serves alcohol, it must adhere to alcohol licensing and sales regulations.

Motels must have proper fire prevention and safety measures in place, including fire alarms, extinguishers, and evacuation plans. Motels are often subject to noise regulations to ensure that they do not disrupt the surrounding community, especially in residential areas.

4. Marketing Plan

a. Who is your Target Audience?

i. Age Range

Young adults to middle-aged individuals (25 to 55 years old) might be attracted to affordable, eco-conscious accommodations during leisure trips, business travels, or road trips.

ii. Level of Education

This could vary, but individuals with at least a high school education or higher might be more likely to consider sustainable and value-oriented lodging options.

iii. Income Level

Middle-income individuals and families who seek comfortable yet budget-friendly accommodations could be a primary target. However, it is worth noting that affordability might attract a wide range of income levels.

iv. Ethnicity

Our target audience is diverse, but individuals who value sustainability and eco-friendliness in their travel choices might include a mix of ethnicities.

v. Language

Offering information and services in English is standard practice, but depending on the location and potential clientele, offering information in other languages might also be beneficial.

vi. Lifestyle

Environmentally conscious consumers who prioritize sustainable choices might be drawn to the eco-friendly focus of Green House® Motels, Inc.

b. Advertising and Promotion Strategies

• Content marketing
• Deliberately Brand Our Motel
• Email marketing
• Events and sponsorships
• Pay-per-click (PPC) advertising
• Referral marketing
• Search engine optimization (SEO).

i. Traditional Marketing Strategies

• Broadcast Marketing -Television & Radio Channels.
• Marketing through Direct Mail.
• Print Media Marketing – Newspapers & Magazines.
• Out-of-home (OOH) advertising – Public transit like Buses and Trains, Billboards, Street shows, and Cabs.
• Leverage direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.

ii. Digital Marketing Strategies

• Affiliate Marketing
• Content Marketing.
• Email Marketing.
• Influencer Marketing.
• Mobile Marketing.
• Social Media Marketing Platforms.
• Search Engine Optimization (SEO) Marketing.

iii. Social Media Marketing Plan

• Create a personalized experience for our customers and their families.
• Create an efficient content marketing strategy.
• Create a community for our target market and potential target market.
• Create profiles on relevant social media channels.
• Gear up our profiles with a diverse content strategy.
• Start using chatbots.
• Run cross-channel campaigns.
• Use brand advocates.

c. Pricing Strategy

When working out our pricing strategy, Green House® Motels, Inc. will make sure it covers profits, insurance, premium, license, and economy or value and full package.

In all our pricing strategy will reflect;

• Penetration Pricing
• Cost-Based Pricing
• Value-Based Pricing
• Competition-Based Pricing.

5. Sales and Distribution Plan

a. Sales Channels

Our sales channels are the various avenues through which we promote and sell our products or services. For a motel business like Green House® Motels, Inc., here are some potential sales channels we will consider:

• Direct Booking through the Website
• Online Travel Agencies (OTAs)
• Mobile Apps
• Phone Reservations
• Walk-In Guests
• Corporate Partnerships
• Travel Agencies
• Social Media and Influencers
• Content Marketing
• Email Marketing
• Local Tourism Boards
• Referral Programs
• Partnerships with Events
• Travel Clubs and Memberships
• Online Ads

A combination of these sales channels will help us reach a wider audience and maximize our bookings. We will monitor the performance of each channel and adjust our strategies accordingly to achieve the best results.

b. Inventory Strategy

Our inventory strategy at Green House® Motels, Inc. involves how we will manage and optimize the availability of our rooms to maximize occupancy, revenue, and guest satisfaction. We will analyze historical data, local events, seasons, and travel trends to predict periods of high and low demand.

This helps us allocate inventory effectively. We will implement dynamic pricing strategies that adjust room rates based on factors like demand, day of the week, special events, and booking lead time. This can help us optimize revenue.

We will offer various stay lengths (e.g., one-night, extended stays) to cater to different types of travelers and accommodate their needs. We will use channel management tools to update room availability across all distribution channels in real-time to avoid overbooking or double bookings.

c. Payment Options for Customers

Here are the payment options that Green House® Motels, Inc. will make available to its clients;

• Apple Pay and Google Wallet
• Gift cards and store credit
• Credit and debit cards
• PayPal
• Cash on service delivery.

d. Return Policy, Incentives, and Guarantees

Return Policy:

• Offer a flexible cancellation policy that allows guests to cancel or modify their reservations within a specified timeframe without incurring a penalty.
• Outline the steps and timeline for guests to receive refunds for cancellations made within the allowed timeframe.
• Address exceptional circumstances such as natural disasters or other unforeseen events that may impact travel plans and outline your policy in such situations.

Incentives:

• Offer a loyalty program where repeat guests earn points for each stay, which can be redeemed for discounts, room upgrades, or special perks.
• Provide discounts for guests who book longer stays, encouraging extended visits.
• Offer rewards or discounts to guests who refer friends or family to stay at your motel.
• Create themed packages that bundle accommodations with local experiences, such as guided tours or tickets to nearby attractions.

Guarantees:

• Assure guests that booking directly through your website guarantees the best available rates, encouraging direct bookings.
• Promise a pleasant and comfortable stay, with a commitment to promptly address any guest concerns or issues.
• Guarantee quiet hours during specific times to ensure a peaceful stay for guests.

e. Customer Support Strategy

We will provide accurate and detailed information about our motel’s amenities, policies, and services through our website, booking platforms, and pre-stay communication.

Clearly display contact information, including phone numbers and email addresses for guests to reach out with inquiries or concerns. Respond promptly to guest inquiries, whether through phone calls, emails, or social media channels. Implement live chat support on our website to provide real-time assistance.

Send pre-stay emails to confirm reservations, share check-in details, and provide information about local attractions or services.

6. Operational Plan

Our operational plan at Green House® Motels, Inc. outlines the key activities and strategies required to effectively manage and operate the motel. Green House® Motels, Inc. will establish a comprehensive property management system to handle day-to-day operations, including maintenance, housekeeping, and upkeep of rooms and common areas.

Develop protocols for move-in and move-out procedures, ensuring a smooth transition for guests. Handle guest check-in and check-out processes, including guest registration, room assignment, and payment procedures.

Implement systems for regular property inspections, maintenance schedules, and repairs to ensure the motel is well-maintained and meets safety standards. Address emergency response plans for situations such as fire, medical emergencies, or severe weather.

a. What Happens During a Typical Day at a Motel Business?

A typical day at a motel business involves a range of activities aimed at providing a smooth and pleasant experience for guests while efficiently managing operations.

Throughout the day, staff members from various departments collaborate to ensure the smooth operation of the motel. Communication and teamwork are essential to provide guests with a positive experience while managing the behind-the-scenes tasks necessary for a well-functioning business.

b. Production Process

There is no production process when it comes to the motel business.

c. Service Procedure

Morning:

• Staff welcome and check in arriving guests, providing keys and information about facilities.
• Housekeeping prepares vacant rooms, restocks amenities, and maintains cleanliness.
• Breakfast service is managed for guests if provided.
• Maintenance conducts routine checks and addresses repairs.

Throughout the Day:

• The front desk assists guests with inquiries, reservations, and special needs.
• Ongoing room cleaning and maintenance continue.
• Administrative tasks, accounting, and communication are managed.
• Maintenance addresses any arising issues.

Evening:

• Guests check-in and out, settle bills, and return keys.
• Additional guest services are provided.
• Night auditing for financial transactions is conducted.
• Property security and lighting are ensured.

Night:

• Overnight staff focus on property security and guest safety.
• Guest concerns are addressed for comfort and satisfaction.
• Preparations are made for the next day’s arrivals, including updating availability and replenishing amenities.

d. The Supply Chain

A supply chain is not applicable to a motel business.

e. Sources of Income

Green House® Motels, Inc. generates income by renting and leasing out mobile homes and offering related services.

7. Financial Plan

a. Amount Needed to Start your Motel Business?

Green House® Motels, Inc. would need an estimate of $10 million to successfully set up our motel business in the United States of America. Please note that this amount includes the salaries of all our staff for the first month of operation.

b. What are the Cost Involved?

• Business Registration Fees – $750.
• Legal expenses for obtaining licenses and permits – $11,300.
• Marketing, Branding, and Promotions – $3,000.
• Business Consultant Fee – $2,500.
• Insurance – $15,400.
• Rent/Lease – $4 million
• Operational Cost (salaries of employees, payments of bills et al) – $150,000
• Start-up Inventory – $250,000
• Store Equipment (cash register, security, ventilation, signage) – $4,750
• Furnishing and equipping – $4.5 million
• Website: $600
• Opening party: $4,000
• Miscellaneous: $5,000

c. Do You Need to Build a Facility? If YES, How Much will it cost?

Green House® Motels, Inc. will build a new facility for our motel, and it will cost us approximately $8.5 million.

d. What are the Ongoing Expenses for Running a Motel Business?

• Employee Wages and Benefits
• Costs for electricity, water, gas, heating, cooling, and other utility services
• Cleaning products, linens, towels, toiletries, and other amenities
• Expenses related to promoting the motel, including online marketing, social media, print materials, and advertising campaigns.
• Annual property taxes
• Property insurance, liability insurance, and workers’ compensation insurance
• Fees paid to online travel agencies (OTAs) or booking platforms for listing our motel and facilitating reservations.
• Expenses for property management systems, reservation systems, accounting software, and other technology tools.
• Costs for providing amenities such as Wi-Fi, cable TV, toiletries, and complimentary breakfast (if offered).
• Funds are allocated for periodic upgrades to enhance the guest experience, such as renovating rooms or improving facilities.
• Office supplies, accounting fees, legal fees, and other administrative expenses.
• Costs for waste removal and recycling services.
• Costs for repairing or replacing equipment, appliances, furniture, and fixtures as they wear out or become outdated.

e. What is the Average Salary of your Staff?

• Chief Executive Officer (Owner) – $72,000 Per Annum
• Facility Manager – $62,000 Per Annum
• Maintenance Officer – $48,000 Per Annum
• Accountants (Cashiers) – $38,000 Per Annum
• Cooks (Chefs) – $36,000 Per Annum
• Administrative Staff (House Keepers) – $35,000 Per Annum
• Customer Care Executive – $32,000 Per Annum

f. How Do You Get Funding to Start a Motel Business?

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank/banks
• Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
• Source for soft loans from your family members and friends.

8. Financial Projection

a. How Much Should You Charge for Your Product/Service?

Budget Motels: Budget motels typically offer basic amenities and minimal frills. Prices can start as low as $50 to $100 per night for a standard room, depending on the location.

Mid-Range Motels: Mid-range motels offer more amenities and comfortable accommodations. Prices may range from $100 to $200 per night for a standard room.

Upscale Motels: Some motels offer upscale amenities and services, such as suites, fitness centers, and on-site dining options. Prices can vary from $150 to $300 or more per night.

Luxury Motels: Luxury motels provide high-end accommodations, often with premium amenities and personalized services. Prices for luxury motels can start at $300 per night and go upwards.

b. Sales Forecast?

• First Fiscal Year (FY1): $1.5 million
• Second Fiscal Year (FY2): $2.2 million
• Third Fiscal Year (FY3): $3.5 million

c. Estimated Profit You Will Make a Year?

• First Fiscal Year (FY1) (Profit After Tax): 15%
• Second Fiscal Year (FY2) (Profit After Tax): 20%
• Third Fiscal Year (FY3) (Profit After Tax): 25%

d. Profit Margin of a Motel Business Product/Service

The ideal profit margin we hope to make at Green House® Motels, Inc. will be between 15 and 25 percent. This refers to our profit as a percentage of our total cost.

9. Growth Plan

a. How do you intend to grow and expand? By opening more retail outlets/offices or selling a franchise?

In the coming years, Green House® Motels, Inc. plans to invest in further sustainability initiatives, expand our room offerings, and strengthen our online presence to reach a wider audience of travelers seeking an eco-friendly stay in Green Bay.

b. Where do you intend to expand to and why?

Green House® Motels, Inc. plans to expand to:

• San Diego, California
• Houston, Texas
• Seattle, Washington
• Atlanta, Georgia
• Denver, Colorado
• Portland, Oregon
• Charlotte, North Carolina
• Indianapolis, Indiana
• Nashville, Tennessee
• Phoenix, Arizona.

The cities listed above have a significant demand for motels simply because they have busy highways.

10. Exit Plan

The founder of Green House® Motels, Inc. aims to exit the company through a merger and acquisition. We wish to merge with a global motel company so that when the founder retires, the company’s management can be placed in trusted hands.

The purpose of globalizing two or more international motel companies is to achieve synergy, in which the total (the new company) is greater than the sum of its parts (the former two distinct entities).