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How To Start Guest House Small Scale Hotel Business In Nigeria

starting a guest house hotel business in nigeria

The business of Hotels is a very lucrative one with a bright future especially in a developing country like Nigeria. It is said that tourism and hospitality are the two areas of business that generate the most income for developing countries. Therefore investing in hotels is investing in a business that has a great future and great potential earning. Although there are several hotels in major cities of Nigeria like Lagos, Abuja and Port Harcourt, there can never be too many of them as foreigners keep coming into the country every time for one reason or another and they want a wide variety of hotels to choose from. (

So if you are reading this article, you are probably thinking about starting a hotel or guest house business in Nigeria and you are asking questions like how can I start a hotel business and be successful in it? Well you have come to the right place as we will be looking at how to start and successfully run a hotel/guest house business and sustain it to gain maximum profit. We will be answering some key questions that most people intending to start this business usually ask.

How to start a hotel/guest house business

To start a hotel/guest house business, there are steps you need to take and things you need to consider before setting out.

 Carry out a feasibility study

An online dictionary defines feasibility study as ‘an assessment of the practicality of a proposed plan or project’. This is a necessary step that must be taken if your hotel business will succeed. This assessment answers questions such as: i. do people in your location of choice need hotels? If they don’t, are there people coming from outside who may need hotel accommodation? What service will the hotel provide that will make it superior to other hotels? Can you sell the idea to other persons? What materials are required? Do I have what it takes to run the business for a long time? These are some important questions that must be answered before you set out so make sure you weigh what you are going into before you start.

 Estimate the cost

The Cost of building a standard hotel in Nigeria

varies depending on factors such as number of rooms whether it is the cost of building a 20 room or 50 room hotel, the cost of land which depends on location and soil condition, whether it will have a restaurant, conference hall, swimming pool, a gym, a lounge, the type of finishing, furniture etc. therefore to answer the question of how much it costs to build a standard hotel in Nigeria, this information must be provided and then a professional quantity surveyor can determine the cost estimate for you to start building the kind of hotel you would want.

 Raise funds

Now that you have an estimate of the cost of building your kind of hotel, it is time to raise funds. You must have determined how to raise funds from your feasibility study be it a loan from a bank, a cooperative society or your savings. Make sure you have enough money to complete the project so that you don’t end up stranded unless you are sure of money coming in the future even if you don’t have the full amount from the start. Things come up in the cause of execution so it is advisable that you add a little margin to the cost to cover unexpected expenses.

 Buy a franchise name

There have been hotels before you came into the business and the easiest way for you to shine is to buy rights to the name of an already established hotel. This will make people to patronize not because of you but because of the name that they have gotten familiar with. Approach the management of a major player and request for the right to use their name. it will definitely cost you money but it’s worth it. You may agree to make a one-time payment or remit a percentage of your profits for a period of time. This is very important so do it.

 Register your hotel

Running a big place like a hotel or guest house without proper registration will land you in trouble so approach the Corporate Affairs Commission and request to register your business. it shouldn’t take too long and it doesn’t cost much to register so that you will have a business name to work with. Once this is done, you have a licence to operate.


As stated in estimating the cost of building your hotel, you should choose a good location for your hotel. Good locations will ensure that more customers visit your hotel. Factors such as access roads, access to pipe borne water, electricity, may be a sight such as a beach or some natural environment will go a long way to make your hotel unique and interesting for visitors to lodge in. therefore look for a nice place to site your hotel. It might be slightly on the expensive side but it will be worth it when the profits start coming in.


This I think is the most important stage of establishing your business. You have done all the underground work and now it’s time for you to erect the structure. It is very important that you do this right. Get well trained and qualified personnel to work on the project. The reason many buildings collapse before or after construction is because the owners try to cut cost and the end up losing everything. It is better to spend a little more on Professionals now and enjoy your building for many years than reduce cost a little and lose your structure. Ensure quality materials are used and the architectural plan based on soil condition and location should be strictly followed. This will save you a lot of trouble later in your business.

 Employ quality and honest staff

Once your hotel structure is up, it is time to employ your staff. This will include management staff and others such as cooks in the restaurant, gardeners, cleaners etc. how your hotel is ran determines how many customers you can retain. If a customer comes to your hotel the first time and was treated well with good accommodation, chances are he will return. However the opposite is the case if he is not happy with the service. Therefore it is necessary to also train your staff on how to deal with customers when they come to lodge. They should be sent on a course to ensure they are properly grounded in the ethics of running a hotel otherwise you will lose customers. Remember there are competitors and you are the last guy in the business so go out of your way to get customers and get them to stay.


Advertising is getting to let people know about your new business. This can be done through social media like Facebook, Twitter etc. You could create a Facebook page for our business and get people to like and share. You can also print hand bills to be distributed. As a way of adding value, you can also make jotters and writing pads with the hotel information on it and give to your customers so that people will get to know about the hotel wherever they use the jotter. You can also use radio and television stations to advertise your business. Sure this will cost a bit but it is important for getting your name out there for prospective customers to see. If you strategise well in your advertisement, you will soon have customers trooping to your hotel and it is left for you to retain them.

 Add value

The concept of adding value is what makes some businesses better than their contemporaries. It means to add something to the service you provide that other people in the same line of business don’t add. For instance provide a pickup service for your customers such that they can be picked up from the airport with vehicles belonging to the hotel. This will add a little colour to your business. You can also offer a certain percent off for customers if they return next time etc. there are many ways you can add value to your business just come up with an idea that will make customers prefer your hotel to any other in the area where you are located. It is one thing for customers to come to your hotel and it is a different thing entirely to retain those customers and adding value is the master instrument used for retaining customers so use it.


This is everything you need in order to succeed in a hotel/guest house business.

If you follow these steps then you will not have any challenge in establishing and running your business. There will be hurdles and many things coming up when you start your business before you master the business if you are new to it but this is normal. You will eventually understand the market and how to navigate so keep on and good luck!.

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