Have you ever dreamed of running your own business? If so, hospitality may be the right field for you.
The industry consists of a patchwork of hotels, restaurants and resorts, the great majority of which are operated by individuals or families, or maybe a small group of investors.
For instance, McDonalds, the biggest restaurant chain in the world, was actually developed by Ray Kroc, a milkshake machine salesman. While the McDonalds brothers launched the first drive-in restaurant, it was Kroc, who, after observing the long queues in the brothers’ establishment, saw the potential for leveraging the format into a massive worldwide network through offering franchises. In fact, his first franchisees were his golfing buddies.
The hospitality industry particularly lends itself to entrepreneurship. Every property, whether it’s a restaurant or a hotel, has its own specific market characteristics which are determined by its location and by the services on offer. Understanding the local market is the key to success and requires an entrepreneurial mind set in order to succeed.
Hoteliers must be all-rounders and persistent!
Those who found their own businesses need to be ‘jacks-of-all trades’. They must master and be able to successfully perform a wide variety of tasks. For instance, besides the basic hospitality skills like preparing and serving food and beverage and managing hotel accommodation, hoteliers need to understand something about architecture, construction, legal and regulatory aspects, IT, marketing, social media, human resources management, accounting, finance, statistics, revenue management, etc., etc. – the list goes on and on…but most of all, hospitality entrepreneurs need to possess dogged determination and persistence. An entrepreneur must also be ready to accept failure as a learning experience. The road to business success rarely goes in a straight line.
The great chains owe their existence to entrepreneurs
You may think that, since nowadays, the hotel industry is dominated by the big chains, like Marriott Hilton and AccorHotels, that there’s no more room for the entrepreneurial spirit. It should be noted these great hotel companies trace their origins to entrepreneurs. For example the original Marriott business was a stand selling root beer (an American soft drink) in downtown Washington DC. J.Willard Marriott and his wife, Alice Sheets Marriott, opened their nine-stool root beer stand in 1927, which subsequently grew into the Hot Shoppes Restaurant chain that evolved into today’s Marriott International hotel company, the biggest hotel company in the world. For the next 85 years (until 2012), Marriott was run by either J Willard or his son, Bill Marriott, even though Hot Shoppes was introduced into the stock market in 1953.
Conrad Hilton took a chance on hotels
Conrad Hilton, the founder of the eponymous chain, got onto the hotel business almost by accident. In 1919, he was on his way to buy a bank in Cisco, Texas, but ended up purchasing a local hotel, the Mobley, instead. What gave him the idea to buy the property? Having arrived in Cisco, the 31-year-old Hilton stayed at the rather featureless Mobley Hotel. The young entrepreneur immediately noticed the queue of people lined up, hoping to get a room. But there were no more available rooms and the owner was so tired of running the property that he did not want to expand. Thus, customers had to be turned away and shunted off to sleep in other hotels. The owner just wanted to retire, so was glad to turn over the hotel to Hilton at an attractive price. While hard work and determination are crucial, entrepreneurial success also depends on being in the right place at the right time.
Accor’s founders bucked the consensus
Paul Debrule and George Pélisson dared to contradict the consensus of France’s hidebound 1960’s hotel industry when they opened the chain’s first property in a beet field outside the northern French city of Lille, a 62-room Novotel in 1967. This hotel defied convention in several respects. First of all it was built outside the city centre where land was cheap. Secondly it eschewed the trappings of luxury, preferring instead to offering value-for-money accommodation to business travellers. And thirdly, the building did not conform to the standards of the French Ministry of Tourism. The chain subsequently grew to be Europe’s biggest hotel group and is now ranked 6th in the world by number of rooms, according to Hotels magazine.
There’s always room for new players
Society is constantly evolving and the hospitality sector along with it. New concepts can take over and disrupt markets in a very short period of time. Just witness the rise of Airbnb, which celebrates its tenth anniversary this year and will book well over 100 million arrivals in its affiliated properties during 2018. The multi-billion dollar firm was founded by two design school graduates, Brian Chesky and Joe Gebbia, who were just desperate to pay the monthly rent.