Business plan for budget pet-friendly hotel

COVID-19 pandemic had affected tourism industry worldwide. International travel to Thailand plunged due to the pandemic and Thai economic had been negatively affected because Thailand had been heavily relying on the spending of tourists as the main revenue of the nation. Many people lost their job, home, family during the pandemic and it was well proven that Thailand cannot only rely on tourists. Many hotel operators have failed and went out of business during the pandemic, but some shifted their focus to domestic travelers and survived. There are still many opportunities with domestic travelers but there will need to be a proper promotion and offer good travel experience. This will not only contribute to the survival of the industry, but it could also lead to attracting more international visitors. Based on what we have seen today, it is evident that domestic leisure travel flows are one of the first to normalize. As the consumer behavior shifted, other lodging options will see an increase in demand. Even though COVID-19 pandemic had negatively affected many industry worldwide but there is one industry that continue to rise and continue to generate good revenue which is the pet industry. The increase numbers of singles, LGBTQ, and aging society are the main factors that drive the pet industry to grow continuously. The market showed an average annual growth rate of 10% since 2017 as pet parenting continue to rise. Additionally, it was found that numbers of pet owners and pet population are also growing with the trend of pet parenting and aging society. This lead to the growing numbers in pet related businesses.Budget hotels segment are found to be on the rise as there are now a few large hotel operators investing in this segment as budget hotel required lower investment but providing better margin when comparing with luxury hotels. Pet parents would treat their pets as it was their child and will most likely take their pets on either business trip or holidays with them where possible. The rising trend of LGBTQ, single, childless couples, and LGBTQ couples, will be the main driver for people to bring their pets during their business trip or leisure travel as they may not have someone to look after their pets when they are away from home. However, based on the findings, there is currently a limitation in pet-friendly hotel whether these are complex policy, additional extra pet fee, extra cleaning fee, no basic amenities for pet being provided, no zoning between cats and dogs etc. All of these facts have limited pet parents in taking their pets with them on the trip. According to these findings, it was identified that budget pet-friendly hotels is of an interesting business and would address the need of pet parents customer. The trend of people traveling with their pets will become an emerging market in hospitality and tourism business. Either it will be business travel or leisure travel, pet owner customers will be seeking for this type of accommodation. Therefore, considering all these factors, the excessive demand, trend and possible future growth of this segment, Hug My Pet hotel project is established in order to accommodate these needs. Hug My Pet hotel will be designed and built specifically for pet-friendly purpose whereby the material for furniture will be made pet-friendly with no additional charges of extra pet fee. Moreover, there will be separate zoning for dogs and cats as well as grooming service and daycare are also available within hotel facility. The project will be having total of 40 rooms, 2 separate dog and cat common play area, 2 dog grooming and daycare, 2 cat grooming and daycare, in a 3-storey building, targeting Thais with the middle to high income who are pet owner and regularly travel for either leisure or work-related. Hug My Pet Hotel business plan covers a comprehensive analysis of industry trends, internal environment, external environment, marketing strategies, hotel management process, service process, human resources management as well as financial strategies. This will enable Hug My Pet hotel to have competitive advantages such as specifically built and designed for pet, simple regulation and pet policy, no extra pet fee charge, budget hotel with competitive price, offer daycare and grooming service, providing basic amenities for pet. It also allows Hug My Pet to analyze project feasibility. According to the feasibility and financial plan of Hug My Pet Hotel, it was identified that Hug My Pet Hotel will require an investment of 29,672,850 Baht. From the analysis base on the base case scenario, it was found that this project is having positive Net Present Value (NPV) of 3,724,271 Baht with the internal rate of return (IRR) of 11% and discounted payback period of 4.46 years. As IRR with the rate of 11% is higher than the financial cost (Weighted Average Cost of Capital: WACC) of 6.3%, this indicate that the project is financially viable and attractive for the investment in this project.