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Hotel Business Plan in Saudi Arabia

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General Business Description

Tourism and hospitality business. The business will be a hotel. 

Mission statement

Our cooperate mission is bringing the best products to and around the world that influences support and satisfaction in achieving excellence and becoming a global tourist destination to meet customer expectations.

Hotel Business Plan in Saudi Arabia

Goals

Short Term Goals

Provision of quality products and services to our customers to create a good legacy. 

Long Term Goals

Saudi Arabia is a tourist destination; therefore, the business aim is to grow and have branches within the kingdom over five years. 

By the end of 2 years, the business will serve customers even on their doorsteps as most people nowadays are ordering their food products online.

Objectives 

  • To provide training to our employees for good customer services. 
  • To ensure employees satisfaction that conveys happy emotion to customers and increased staff motivation.
  • To maximize business profit by offering quality services.

Business Philosophy

The hotel business has been in our bloodline for ages. Therefore, it is by pressure to continue the trend on a revised scale that maximizes the new global tourism trade.

Tourists will be the biggest target while maintaining an excellent local relationship in the domestic tourism sector.  

The tourism and hospitality industry expects more and more growth over time, making it the best industry to start a business in. 

Long Term changes

The industry is expected to expand over time as the world is becoming more civilized, hence increasing tourists’ mobility through relaxation of countries entry with a target of 100 million tourists by 2030. 

Short Term changes

The introduction of projects like The Red Sea Development, Amala And NEOM aims to improve its investment opportunity.

This will create a more diverse market that is expected to have many arrivals increasing the potential of customers for our business.

The company’s main strength will be a good relationship with staff, customers, and management, ensuring maximum efficiency and productivity, which is crucial for ensuring our company’s dominance in the tourism and hospitality market.

Running the company’s centrally and visas introduction is expected to create a more extensive demographic base. 

The business’s main competitive strength will be ensuring customer satisfaction, which is crucial in promoting awareness on a domestic and global scale whereby the spillover is expected to increase visitors.

Being brought up in a family where a hotel is a part of them has given me the chance to learn how the business is run and what it takes for such a business to succeed. I am good at managing different groups of people and very good at appreciating every person ethnic background that helps in creating a good relationship between my employees and me.

The business will be a sole proprietorship because, as an individual, my interest is to create a dynasty based on hospitality to maintain the family legacy. 

Product and Services 

The hotel will be a multi-purpose business that will be offering the following products and services: in-room dining, fitness centre and SPA, indoor lap pool, valet parking, with other services provided in the hospitality industry. 

These are the general long term action plans. They are made for achieving the main objectives of an organization. They tell us what the production department must do to achieve the organization’s top aims and acts as the road map. Enable a business to only focus on a specific target market and feature set instead of trying to be everything to everyone. The main strategies used in production planning and control are the chase strategy, level production, make-to-stock, and assemble to order. There are four strategies for better performance: product focus, process focus, repetitive focus, and mass customization, which are used to improve operations. Example of product initiatives includes; improve customer satisfaction, increase lifetime customer value and upsell new services. For a hotel, strategic planning should ask what services a hotel wants to deliver, request the services needed, and what audience to target. Following are some of the marketing strategies implemented in a hotel; make the most of your social media, leverage technology to better market your hotel, reward guest loyalty, use a vanity website, partner with local businesses, email marketing and evolve operations based on guest feedback. To improve hotel productivity, follow can be done; provide incentives, go paperless, reduce workloads, employ accounts payable automation, and encourage communication.

The best way to price our products is by using price set by our competitors as we are not entering the industry to scare others but improve the services they have been giving to the community. The use of production cost as the business is not expected to be making losses but profit. We will not use demand to set our prices as sometimes by using the strategy as sometimes it scares away customers. Our prices will remain constant unless forced to change due to changes in the production cost or regulations set aside by the government.

Market Research

Market research is gathering, interpreting, and analyzing information about the industry and identifying all the gaps in the market that the business will aim at filling. The process helps in good decision making and helps in enlightening the marketing activities of the company. 

Secondary Data

Organized reports, statistical data basis, and government-funded studies have enabled the collection of the required information to improve the industry’s knowledge base.

Products 

In-room dining. It is an all-round service that involves cabs, bag checking, room services and food provision. 

It will attract and create a good legacy for the business as visitors needs good caring when under your service. 

Customers 

Customers will be both domestic and international, with a significant focus on international customers.

Competition

The tourism and hospitality industry is the central key aspect of the Saudi Arabian economic flow, therefore rivals’ presence. The business will offer affordable products and ensure professionalism enabling world-class standards. 

Marketing Strategy 

The business will focus on a social network and viral marketing to organize, execute and road map a solid customer base.

Promotion

The hotel will give all our customers free food on the first day of operation and free drinks all through the week to all customers. This will help attract more customers and be able to sell our products. This because whoever will love what we will be offering as our products will keep coming back.

Pricing Strategy

The best way to price our products is by using price set by our competitors as we are not entering the industry to scare others but improve the services they have been giving to the community. The use of production cost as the business is not expected to be making losses but profit. We will not use demand to set our prices as sometimes by using the strategy as sometimes it scares away customers. Our prices will remain constant unless forced to change due to changes in the production cost or regulations set aside by the government.

Sales Tactics 

Our products will be sold directly to our customers to improve our relationship with the community and get additional customer feedback. This will help improve the services we will be giving to our customers, making us competitive enough. 

Distribution Channel or Strategy

Our products will be sold directly to our customers to minimize problems associated with large channels of distribution. Food products are best sold now to the customer to prevent mishandling, reducing the original product’s quality.

Legal Environment

License is an official permission or permits to do, use, or own something and the document of that permission or access. A party grants it to another as an element of an agreement between the two. To start and run a business, we will be required to have the following legal and licensing requirements; business name registration, business name reservation, business registration as the company is a sole proprietorship, business permit, food/ health-related permit, and fire safety certificate are some of the requirement to start a business.

According to Aleidan (2017), Saudi Arabia has implemented new laws guiding the tourism industry that acts as the primary source of the hospitality market by opening up their borders and offering visas to help them attain 100 million visitors yearly. The law ordered more lands for investment that will help attract more global hotel franchisors.

Personnel

The business will require about 50-75 workers. The company is open to all types of labour, either skilled, unskilled or professional. What matters most is the experience and the ability and willingness to adapt to global trends.

 

Job title No. Qualifications Duties Salary ($)
Business manager 1 Possess skills in sales and marketing

Good in planning and management

Should not micromanage

Should handle pressure well

Should communicate honestly

Should build a work culture of mutual trust

Should focus on employee strengths

Accomplish department objectives by managing staff; planning and evaluating department activities

Maintains staff by recruiting, selecting, orienting and training employees

Ensures a safe, secure and legal work environment

Develops personal growth opportunities

Net profit
Technical director 5 Diploma in information technology

Should not work under supervision

Good at problem solving and decision making

Be able to plan and forecast

Be able to motivate a workforce

Computer skills

Act as the technical point of contact for the team

Representing the business interests

Direct the team

Facilitate technology transfer

35,000
Head chef 3 Outstanding cooking skills

Real creativity when it comes to food

Ability to create menus that are innovative and profitable

Deep understanding of ingredients and produce

Capacity to work under pressure

Excellent leadership and management skills

Controlling and directing the food preparation process

Approving and polishing dishes before reaching the customer

Managing and working closely to other kitchen staff

Creating menu items, recipes and developing dishes ensuring variety and quality

30,000
Kitchen staff 20 Ability to use kitchen equipment e.g., meat slicer

ability to bone meat, wash, peel and cut vegetables and prepare a wide range of ingredients

knowledge of hygiene and safety standards regarding food preparation and storage

Undertaking food preparation task as directed

Preparing ingredients, cleaning vegetables, preparing simple dishes, observing correct cooking times and temperature, using cooking equipment, utensils and machinery, cleaning cooking utensils and keeping work stations and surfaces clean and tidy.

15,000
Waiting staff 15 Knowledge of cash register and any ordering information system

Customer oriented approach

Critical thinker and problem- solving skills

Team player

Good time management skills

Great interpersonal and communication skills

Providing excellent wait service to ensure satisfaction

Taking customer orders and delivering food and beverages

Making menu recommendations, answering questions and sharing additional information with restaurant patrons

12,000
Guard 5 Good communication skills

Be able to do first aid and be able to fight a fire

Experience will be an added advantage

Ensuring customers security

Direct customers as they park their vehicles

General security of the business

9,000
Cleaner 5 Reasonable level of fitness

Time management

Awareness of health and safety procedures

Reading skills for following instructions

Punctual, reliable and trustworthy

Performing and documenting routine inspection and maintenance activities

Carry out cleaning tasks and special projects

Cleaning, stocking, and supplying designated facility areas

5,000

Inventory

The business will offer supplies inventory.

Item 1st Year 2nd Year 3rd Year
Current Assets

 

Stock

Cash in hand

Cash at Bank

Debtors

Total current assets

Current liabilities

Bank overdraft

Creditors

Total current liabilities

Working Capital

 

 

450,000

600,000

750,000

150,000

1,950,000

 

400,000

150,000

550,000

1,400,000

 

 

The rate of turnover is expected to grow with the implementation of new laws guiding the industry. There are factors that fluctuates the flow of customers in the country, mecca being a key. The gulf is largely Islamic therefore the products offered will be much related to their culture.

Suppliers

The business will allow pay on delivery services to our suppliers and focus on eradicating credit no matter the cost.

Financial Plan

Projected Cash Flow Statement

 

 

Dec​​ 

 

460,000

 

460,000

 

270,000

145,000

4,000

3,500

2,600

 

 

 

 

 

 

425,100

34,900

223,300

PROJECTED CASH FLOW STATEMENT

FOR YEAR 2026

Nov​​ 

 

450,000

 

450,000

 

270,000

140,000

3,000

3,200

2,500

 

 

15,000

 

 

 

433,700

16,300

188,400

Oct​​ 

 

440,000

 

440,000

 

270,000

126,000

2,000

3,000

2,500

 

 

 

5,000

 

10,000

418,500

21,500

172,100

Sep​​ 

 

400,000

15,000

415,000

 

270,000

130,000

1,500

2,000

1,900

 

 

 

 

 

 

405,400

9,600

150,600

Aug​​ 

 

415,000

 

415,000

 

270,000

135,000

2,000

2,300

2.100

 

 

 

 

 

 

411,400

3,600

141,000

July​​ 

 

420,000

 

420,000

 

270,000

130,000

 

2,000

2,000

 

 

 

 

 

 

404,000

16,000

137,400

June​​ 

 

435,000

10,000

445,000

 

270,000

125,000

 

2,500

2,000

 

 

 

5,000

 

 

404,500

40,500

121,400

May​​ 

 

410,000

 

410,000

 

270,000

120,000

 

2,000

2,000

 

 

 

 

 

 

394,000

16,000

80,900

Apr​​ 

 

420,000

 

420,000

 

270,000

135,5000

 

2,300

2,200

 

 

 

 

 

 

404,500

15,500

64,900

Mar​​ 

 

425,000

 

425,000

 

270,000

 

133,000

 

2,000

2,000

 

 

 

 

 

 

407,000

18,000

49,400

Feb​​ 

 

410,000

 

410,000

 

270,000

125,000

 

2,500

2,100

 

 

 

 

 

 

399,600

10,400

31,400

Jan​​ 

 

410,000

100,000

510,000

 

270,000

130,000

2,500

2,000

2,000

35,000

2,500

20,000

5,000

10,000

10,000

489,000

21,000

21,000

Items​​ 

Cash in flow

Sales​​ 

debtors

Total inflow

Cash outflow

Salaries

purchases

Advertisement

 

Water Bill

 

Electricity

 

Insurance​​ 

License and permit

 

Acquiring and Training Employees

 

Consultation fee with experts

 

Acquisition of accessories

 

Miscellaneous Expenses

 

Total outflow

Net cash

Accumulated cash

Pro-Forma Income Statement

 

Items

2026

2027

2028

Sales

Cost of Sales

Gross profit

Expenses

Salaries

Advertisement

Water Bill

Electricity

License and Permit

Insurance

Acquiring and​​ Training Employees

Consultation fee with experts

Acquisition of accessories

Miscellaneous Expenses

Total expenses​​ 

Net profit before tax

Net profit

Provision for tax (10)

Net profit after tax

5,095,000

1,574,500

3,520,500

 

3,240,000

15,000

29,300

25,900

2,500

35,000

35,000

 

15,000

10,000

20,000

3,427,700

3,427,700

92,800

9,280

83,520

 

 

 

 

 

 

Balance Sheet

Item

As at Opening Date 1/01/2026

As at the end of the year 2026 31st​​ Dec.

As at End of Year 2027 31st​​ Dec.

Assets

Current Assets

Cash​​ 

Stock

Debtors

Total current assets

Fixed assets

Land and building

Production tools

Total fixed assets

Total assets

Current liability

Creditors

Bank overdraft

Total current liability

Long term liability

Bank loan​​ 

Owner’s equity

Net profit

Total long- term​​ liability

Total liability and equity

 

 

 

1,350,000

450,000

150,000

1,950,000

 

200,000

113,799

313,799

2,263,799

 

150,000

400,000

550,000

 

750,000

800,000

92,800

1,642,800

2,192,800

 

 

Break Even Point

Particulars

Amounts

Fixed Costs

Salaries​​ 

Insurance

License

Acquiring and Training Employees

Consultation fee with experts

Acquisition of accessories

Miscellaneous Expenses

Total fixed cost

Variable Costs

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Water bill

Electricity bill

Total variable costs

 

3,240,000

35,000

2,500

35,000

15,000

10,000

20,000

3,357,500

 

15,000

29,300

25,900

70,200

Total Contribution

 ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​ = sales – variable cost

  = 5,095,000 – 70,200

  =5,024,800

Contribution Margin Percentage

 = Total contribution *100

 Sales

 = 5,024,800 *100

  5,095,000

  = 98.62%

Total Fixed Costs

=3,357,500

B. E. P

= Fixed Costs

Contribution margin

 = 3,357,500

 ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​ 98.62

= 34,044.8185

Expected Profitability Ration

Gross Profit Percentage

 = Gross profit *100

 ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​ ​​ Sales

 = 3,520,500 *100

  5,095,000

  = 69.10%

Return on Equity

 = Net Profit after tax *100

   Owner’s equity

 = 83,520 *100

  800,000

  = 10.44

Return on Investments

 = Net profit after tax *100

   Total investments

 = 83,520 *100

  2,192,800

  = 3.81

Conclusion

Saudi Arabia is one of the most affected countries by the COVID-19 restrictions that prevent individuals from visiting other countries. The pandemic has hit the tourism and hospitality industry the most. With the vaccines being now given, the industry is expected to revive the current trends. Therefore, entering the industry will have significant benefits as the movements will be accessible worldwide. People are expected to move in large numbers hence early preparations will be best for​​ a new business.

The country is full of Arabs. Therefore, products preparation will be more Islamic, fostering an intercultural coexistence among visitors and natives. Individuals nowadays are more into having a fan; thus, investing in a hotel business that​​ will be offering in-room services will attract more individuals whose aim is to have fun. The business primary strategy is the provision of high-quality food products and ensuring a high level of cleanness. Also, our food products will be soldat affordable prices to attract every person within the area regardless of their income levels. Lastly, I will ensure that I higher technical director and qualified personnel who will satisfy the demand we are expecting from our customers. Most couples prefer a night​​ out with their number expected to rise, allowing the business to thrive even much better.

The motivation of staffs presents proper enthusiasm throughout each detailed product. Interaction on both personal and potential guest basis gives a more profound look that reviews and analysis a combination of marketing methods vital for the adaptation, improvements and performance of each established department. Compensation for slim margins allows for automatic prediction of customer flow strong in preparing and purchasing inventory.

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