When choosing a hotel, location is one of the top selection criteria for travelers. On the demand your hotel will generate, the location has a big impact and therefore will influence the price of your hotel rooms in the market. Therefore, the hotel site selection process is a key step when starting a new luxury hotel and it should not be taken too lightly. In the site selection process, it is very important to stay focused in your objective. You won’t be able to meet your financial projections if the location does not work out the way you thought. As a result, various troubles will occur in your newly launched hotel business. Location can be a very important factor behind the success or failure of your hotel business.
1. Upcoming Neighbourhoods
The neighbourhood around your proposed hotel site is a very important factor behind your hotel’s success. It is thought by many experienced hotel chains that for improving an underdeveloped or neglected neighbourhood, the hotel will be the catalyst and clean up the area. Many times it does not happen though sometimes this may work.
2. The Needs Of Your Clients
What the guest really wants is a major question. There are many factors which he/she will consider booking a luxury hotel. They include proximity to important spots and connectivity via transport.
You have to consider many other factors such as the location looking for by the guests, their price sensitivity, whether they are looking for a trade-off between price and location or they prefer to pay premium and be smack in the middle of town on a prime location.
Apart from these, some other factors are also taken into consideration such as beside the hotel itself, what the location has to offer and if they need to go anywhere then how easy it will be for them. Try to remember that they have another travel motive and they are not only coming to your hotel.
So, we have learned which could have a potential impact on our hotel business and what definitely will not change in the immediate surroundings.
The things to be considered are the needs of the guests, the guest market segments that are being targeted and whether these market segments are met by your location.

3. Free Online Research Tools

Social media platforms and a lot of new marketing websites evolve around the location. You can find maps on travel websites like Google Hotel Finder, HipMunk, Booking.com and TripAdvisor.
The average price level per star rating for each area over the year is derived by you from these maps. You will get a valuable insight into the revenue potential of a hotel in each part of town by this price index. It will be noticed by you that especially when you are on the border of the town, sometimes just 2 blocks can have a large impact on price.
As an example it can be stated that the hotels which are really within the actual official town are included by OTA in their general listings and in this list, hotels located in municipalities are not always included, even though it is just across the street. You will see a large decrease in demand if your hotel location is not part of the main listing of the destination. Therefore, you must be careful about the fact that you are on which street.
We can get valuable insight into the process of valuation of the location of luxury hotels around your possible location by consumers. This insight you can get through new social media platforms and review websites like TripAdvisor, Yelp and Zoover plus and guest reviews on the OTA. You would be limited from the start as to how high a score you could achieve if the scores are too low. That is why these scores should be taken into consideration.
There are also some other important conditions which are:

  • Is a hotel allowed considering the zoning of the location? Or can it be easily changed if it doesn’t?

  • Do the site have utilities like sewer, water, electric, gas (optional) available?

  • Can enough hotel rooms including suite rooms be constructed to reach a healthy ROI considering the size of the land?

  • Can the building or land be bought or leased by you? And in return for equity in the hotel business, would the owner consider exchanging part?

  • In the area, how many hotel rooms including premium rooms currently exist? Has success been gained by these hotels? Are they “mom and pop” businesses or chain affiliated?

  • In the immediate area, how many new hotels and rooms are planned for development?