When purchasing a hotel, the size of the property is an essential consideration that can significantly affect the success of your investment.

While location and amenities are important, the hotel's size shapes both the guest experience and your operational strategy.

These advices are mainly for the first-time buyers.

‍

‍Hotels by the size

• Small Hotels: With up to 25 guest rooms, small hotels create an intimate and personalized environment, making them perfect for buyers seeking to offer a unique and memorable guest experience.
  ‍
• ‍Medium-Sized Hotels: Ranging from 26 to 100 rooms, medium-sized hotels balance personal service with the capacity to host diverse audiences. These properties often feature a boutique ambiance along with amenities like gyms and meeting spaces.
  ‍
• ‍Large Hotels: Large hotels, with a minimum of 100 rooms, come equipped with extensive amenities, including multiple restaurants, conference facilities, and large event spaces. They cater well to business conventions and large tour groups, appealing to buyers focused on these markets.

So, where can independent and first-time hotel owners find the sweet spot? Let’s dive in and explore the options.

‍

Why a Minimum of 15 Rooms?

Maybe you’ve found a charming 6-room B&B, and are wondering if it’s a good investment. The reality is that hotels with fewer than 10 rooms often struggle to cover operational costs, like staff salaries for cleaning and check-ins. Managing everything yourself—from cleaning rooms to greeting guests—can quickly become overwhelming, leaving little time for personal freedom.

Having at least 15 rooms allows you to hire staff, letting you focus on guest experiences and strategic growth. This size also makes it easier to attract group bookings, such as corporate retreats or family gatherings, providing a more stable revenue stream.

It’s also the right size for adapting your offerings based on guest feedback or seasonality, giving you room to experiment and refine your brand without the pressure of managing a large property.

Very few people buy a hotel with 150 rooms by a mistake. In this range you probably have a team advisors and some experience/credibility to avoid big mistakes. But when you are starting, buying a hotel with a small a number of rooms is by far the most common mistakes.

‍

Listen our podcast where we discussed the topic of minimum number of rooms.

‍

Why a Maximum of 40 Rooms?

Maybe you’ve stumbled upon a 60-room beachfront hotel, and are tempted to seize the opportunity. However, it’s essential to consider the complexities that come with managing a larger property. While such a hotel may offer potential for higher revenue, it often requires a focus on standardization, which can weaken the personalized experiences you aim to provide.

With fewer than 40 rooms, you can easily automate or outsource tasks and provide self-service solutions that enhance efficiency and improve the guest experience. However, once you exceed that number, managing operations becomes more complex and often requires additional staff for various roles, such as front desk management, housekeeping coordination, and sales.

There is also the F&B dilemma - once you hit 40 rooms you may consider operating an onsite restaurant, which greatly increases operational complexities. Running a restaurant adds demands, requiring careful management of staffing, inventory, and customer service. 

These factors can shift your focus away from creating unique guest experiences and toward navigating the operational challenges of a larger establishment.

‍

The Sweet Spot: 15-40 Rooms

For independent hotel owners and first-time hoteliers, properties with 15-40 rooms are ideal. This size strikes a balance between operational efficiency, guest experience, and financial viability. Hotels in this range are large enough to generate sustainable revenue yet small enough to maintain personal service and flexibility.

With 15 to 40 rooms, you can cater to different segments, like independent travelers during peak seasons, corporate retreats on weekdays, and weddings or family gatherings on weekends. This variety helps keep bookings steady throughout the year while preserving the unique atmosphere that sets your hotel apart.

Hotels in this range offer newcomers a chance to test the market without overwhelming financial or operational demands. With fewer rooms, startup and renovation costs are lower, making it easier to scale as you gain experience. You can maintain personal connections with guests while automating various operational aspects—something that becomes harder in larger hotels.

‍

Conclusion

Choosing the right size for your hotel is crucial, as it affects everything from guest experience to operational complexity and financial performance. Small hotels offer personalized service and lower operational costs, while medium and large hotels require more resources but can yield higher returns.

For new hoteliers or those funding their ventures independently, hotels with 15-40 rooms provide an excellent balance of size, scalability, and control. Whether you’re aiming to create a boutique experience or test the market before expanding, selecting the right hotel size is key to your business's success.