Would you Crowdfund a Hotel Start-up?


Crowdfunding is a concept that has grown from strength to strength in recent years with movies, music, inventions and a whole range of other things all being funded through crowdfunding websites. These sites allow many people to invest into new ideas with smaller amounts of money because they think that the idea will become a success, or because they feel some attachment to the overall cause of a certain start-up or idea.

One crowdfunding concept which caught my attention recently was the idea of crowdfunding a hotel start-up. Tourism is a competitive field and the need to raise a large amount of cash before you really see any sort of return can be a huge stumbling block to many people who would like to get into this industry. What if you could raise money from people who might also become your future guests though? What if you could find people who were willing to invest in your new hotel idea on the basis that they have some level of input into the design, location and features of the finished hotel and also have a certain amount of free yearly accommodation thrown into the deal? Sounds great doesn’t it? Sure, as a hotel owner you may be giving up some future accommodation space and therefore future revenue to start-up investors, but if it allows you to get your venture off the ground, might it be worth it? I think the idea has legs and I’m sure many of you will too.

So what could you offer in order to attract investment into your new venture or what would you as an investor be looking for in order to part with your hard earned cash? Here are a few ideas which could be thrown into the equation.

Input into the potential location

Let’s say we have several people who would love to be able to buy a holiday apartment in a specific dream location but they just don’t have enough cash to enable them to realise their dream. What though if they could have all of the benefits of a regular place to stay within their chosen vacation spot for a lot less cash, while maintaining the ability to come and go as they please for a certain number of weeks in the year or even for unlimited weeks of the year? I know that this sounds and awful lot like a timeshare arrangement but the difference would be that they own a true share in the property as well as entitlement to a share of the profits of the business. Would this be attractive to you, would this lure you into parting with your cash?

A share of the profits

What if potential investors were offered a share of the business in return for their investment? In crowdfunding terms, the investments might be smaller than they would be if they were coming from something like a bank or private equity, but the share of the profits could be equally as small – yet attractive considering the level of investment. When you combine a share of the profits of the hotel with the benefits of owning rights to regular accommodation in your chosen location, would this sound good to you? Would this convince you to crowdfund a new hotel?

Deciding the facilities

We’ve all looked at hotels in the past which would have been just perfect… if only they had this feature or that facility. What though if you could have a say into exactly what facilities and specifications your crowdfunded hotel were to have? Would this tempt you to invest? Maybe you’d like a tennis court or perhaps you’ve been craving a Swedish massage.

The possibilities when it comes to crowdfunding a hotel are vast and I’m sure many people would be interested in the overall idea. but I suppose the question is this

What would you like to see in return for your investment to convince you to crowdfund a hotel start-up?

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