“Do NOT build a hotel if you cannot answer these questions.”
By Charles Tan
Most failed hotels didn’t collapse because of bad luck.
They failed because decisions were made too fast — before the project was truly ready.
This episode is written for people with little or no hotel background,
to help them pause and think before spending tens — or hundreds — of millions.
Set 1: The Foundation Questions
❌ If you can’t answer these, you’re not ready to build.
- Who is this hotel actually built for?
- Who is your core guest?
- Age, income level, lifestyle
- What do they choose a hotel for? (price / location / experience)
If your answer is:
“Anyone can stay here.”
Then the truth is simple:
You don’t know your customer yet.
- What will guests realistically pay per night?
Not the price the owner wants,
but the price the market will accept all year round.
- Can you survive during low season?
- Does this rate truly cover your real costs?
- Compared to nearby competitors, where do you stand?
Hotels don’t fail because guests don’t come.
They fail because the room rate cannot support the cost structure.
- What is your hotel’s selling point — in ONE sentence?
Ask yourself:
“If a guest asks, ‘Why should I stay here instead of the others?’ — what do I say?”
If it takes a long explanation,
you don’t have a clear selling point yet.
A good hotel must be clear — even before the building exists.
Set 2: The Operational Reality
❌ If you’ve never thought about these, problems are guaranteed after opening.
- Who will actually run this hotel?
- The owner?
- A hired GM?
- A management company?
If you don’t know yet,
there’s a high chance the design will not work in real operations.
A hotel should never be designed
without knowing who will run it every single day.
- How many staff do you really need to survive?
- Housekeeping per number of rooms
- Front of House vs Back of House ratio
- Which areas require unnecessary manpower?
If you’ve never calculated this,
hidden costs are already waiting for you.
- Is the restaurant meant to generate revenue — or just create an image?
This question is critical.
- How do your core guests actually dine?
- How many table turns per day are realistic?
- Can the kitchen handle real volume?
A poorly planned restaurant
often becomes the hotel’s biggest cash drain.
Set 3: The Most Dangerous Mindset
❌ If your answer is “We’ll fix it later” — this is the biggest risk.
- Can you survive if costs increase by 10–20%?
- Electricity
- Labor
- Maintenance
A good hotel must allow room for error — starting from the design stage.
- Can you renovate or adjust the hotel within 5 years?
- Is the structure flexible?
- Can systems support expansion?
- Can renovations happen without shutting down operations?
The most dangerous hotel
is the one that cannot be fixed.
- If you could go back in time, would you still build it this way?
It sounds like a simple question.
But many failed hotel owners eventually say:
“If I had known this back then,
I would never have built it.”
EP 7 Conclusion
This checklist is not meant to stop you —
it is meant to protect you.
If you can answer these questions clearly, it means:
- You are beginning to understand the hotel business
- You are significantly reducing massive risk
- You already have a higher chance of success than most
A good hotel does not start with a beautiful design.
It starts with the courage to ask yourself the right questions.
