Daily Archives: October 14, 2020

What is The Investment Value of a 4-Star Hotel and When The Return on Investment?

What is the investment value of a 4-star hotel and when the return on investment?  The 4-star luxury hotel and all the super special services from its hundreds of employees, make millennial friends sometimes feel at home for a long time to stay. It doesn’t matter if they have to spend a lot of money starting from Rp. 600,000 to millions of rupiah they are still comfortable staying in this luxurious residence for a long time.

Have you ever thought about trying your luck in the hotel business? So how much capital should be prepared to invest in the hotel business?

The hospitality business is a promising business for millennial friends who already have very well-established finances. However, those who are not financially established should think again because the hotel business is a luxury business.

According to several researches building a hotel is not an easy matter but it needs networking with an extensive network, an understanding of service performance to digitization.

This research emphasized that the key challenge in building hotels is building manpower. This is because although many companies and big players in the hotel industry are ready to invest. But without man power, it will be difficult to realize.

“Dare to invest any amount, but in the end it is the man power who runs the business, this is the key,” this is the key point.

Millennial friends besides man power, there are still other things that also need to be considered in order to build a hotel business. Carefulness is needed to see the location and read information related to the potential for an area to be frequently visited.

In addition, don’t forget to continue to enrich your insight into the hotel industry in order to keep getting access to how the hotel industry develops its business lines both at home and abroad.

As for the amount of investment, maybe millennial friends can’t wait to find out how much it is worth building a 4-star hotel and how long it will take to pay off. This is what we call minimizing investment first.

How much capital is needed to build a 4-star hotel, in fact depends on the area, and how the access and facilities provided by the Regional Government (Pemda) in welcoming the ball to develop investment in their area.

It depends on the area (area) because distribution will have an impact on the decline in investment value. In average, if at this time, if we want to build a normative hotel with 4 stars, it (per Room B) is up to USD 80 thousand / Per Room B = (Total investment, divided by the number of rooms) as for the number of rooms for type 7 × 4 a minimum of 120 to 150 rooms.

We also continued to pursue with follow-up questions. Approximately the total investment needed to build a 4-star hotel. Still patiently, at least a total investment of IDR 150 billion is needed.

The average in avarage is around IDR 150 billion for a 4-star hotel class, including restaurants, pubs, with various other luxurious facilities. There is no limit to 5-star hotels.

Wow, it turns out that you need big capital to build a hotel business for millennial friends who have tens of billions of assets, don’t be disappointed. Still being able to realize the dream of making luxury hotels by collaborating with other investors will be cheaper, right?

When we asked, with such a large amount of capital, how long after the process of building a 4-star hotel was carried out the investor could return on investment?

We did not have a definite calculation regarding how long it would take for a luxury hotel to return on investment. According to him, this problem is a bit difficult to calculate because the core business is all kinds. However, according to his estimates, it will take at least 8 years to return to capital.

Usually, as investors, we target that one investment must return at least in 8 years, because if more than that it is better if the money is deposited in the bank only for deposits. The challenge is there. To find investors within 8 years is very challenging for us as operators.

So, if you are still interested in trying the hotel business, don’t forget to prepare enough money. And start learning the ins and outs of the business and industry as best you can. Who knows, millennial friends can one day realize their dream of owning their own 4-star luxury hotel