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Things to consider before investing in tourist accommodation

Provided by Business Partners Ltd, South Africa's leading investor in SMEs


With the number of tourists visiting South Africa every year on the increase, accommodating local and overseas tourists poses a great opportunity for an entrepreneur to provide accommodation. This is, however, something to go into with your eyes wide open.

If opening an accommodation business is something you've been thinking about for a long time, here are some of the characteristics of the tourism industry you'll have to consider before investing.

  • This industry generally is based on long term investments of over four years and often the first two years run at a loss
  • You must be able to fund the shortfalls, especially during off peak seasons
  • Do you have an existing network to build a client base from?
  • Identify a niche and build your offering around that niche. Create a differential advantage that is of value to your target market
  • Be visible and accessible to main arterials and attractions relevant to your target market
  • Have a professional-looking website where visitors can book online
  • Link up with complimentary services - such as a day-spa or shuttle service - so your business can form part of a holistic experiential package
  • Customers would like to know that standards they can expect from an establishment, so it is good to have a star grading
  • You must be totally accepting of the fact that this type of business takes up a substantial portion of your life
  • You need to be friendly, courteous, pay attention to detail, delight in serving your customers
  • You need to be interested in people and their diverse cultures

Everyone goes into business with the objective of making a profit, but this kind of business won't work if you don't have a passion for it. Again, you won't be making a quick buck, so if that's what you're after, you may want to think about trying something else.

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