This page features essential marketing information for people planning on starting an accommodation business. Use the bookmarks below to navigate quickly to the section you require, or download the full pdf document (397 kb).

The basics
Deciding to start up an accommodation business
Am I ready to take the next step?
Reaching your decision
Meeting Government requirements
Insuring your business and planning for growth
Accreditation
Seek Advice
Planning for growth

The basics

• Make sure you and your family are ready – this industry has a demanding set of skills that will probably change your lifestyle
• Do your homework and know your local, state and federal requirements
• Ensure that you’re appropriately insured as a tourism business
• Good tourism businesses are always changing and growing; undertake all relevant research
• Be adequately resourced. It will take longer than you think to get things off the ground and to reach break-even, let alone make a profit
• Do you like dealing with people of all different types and personalities? Could you do it every day?
• Approach the business concept strategically; develop a business plan

Tip: Starting up in Tourism Workshop

Tourism Alliance Victoria, Small Business Victoria, Tourism Victoria and the OAMPS Group have combined their expertise and resources to develop an introduction to the tourism industry for new operators. Its intention is to provide a strategic insight across a range of essential business practices and improve overall business acumen and planning. For more information visit www.tourismalliance.com.au

Other valuable resources for business starters are:

• The Victorian Business Line - 13 22 15
• Business Victoria website - www.business.vic.gov.au
• Victorian Business Centres (20 kb)

Deciding to start up an accommodation business

What is an accommodation business?

It is important to start with a clear understanding of what are and what aren’t ‘accommodation businesses’ in Victoria. The legal definition comes from the Health (Prescribed Accommodation) Regulations 2001.

Businesses covered by the Prescribed Accommodation Regulations are:

Businesses not covered by the Prescribed Accommodation Regulations are:

• caravan parks
• public hospitals and nursing homes
• retirement villages
• premises where five or less people can be accommodated

Am I ready to take the next step?

Running a touring business is definitely not a nine-to-five job. How ready are you to take the next step? Ask the following questions:

• Have you thoroughly researched potential tourism markets and the level of competition in the area you plan to set up your business?
• Are you willing to work long hours, as tourism is not a 9 to 5, Monday - Friday industry?
• Have you investigated the local, state and federal licences and registrations that could be relevant to your business? Have you investigated insurance costs?
• Do you have the financial resources to cover start up and living costs, until your business becomes profitable? Could you survive 2-3 years before making a profit?
• Have you written a business plan, complete with a marketing plan and projected budget?

If you answered ‘No’ to any of the questions above, it is recommended that further research is undertaken before commencing your business. Start by completing this form: Step-By-Step: Are you ready to start a business.

Do you have the personal attributes to run a tourism business?

What skills do you have, and what skills gaps will you need to fill?
To help you to assess your skill level and training needs click here

Have you researched the market demand and need for your touring business?
To discover free and low cost research opportunities click here

Reaching your decision

The decision to commence a touring business requires careful consideration regarding the type of tour you intend to develop.

The decision to commence an accommodation business requires careful consideration regarding the type of property you intend to develop.

• Which type of accommodation property do you want to develop? E.g. mass resort, boutique motel, B&B, budget accommodation?
• Who are your competitors? How will your property be significantly different to other accommodation providers in your region?
• How much will the operation realistically cost to set up and how much money do you have available to invest in the business?
• Can you obtain affordable insurance cover to operate the business?
• Could you cover operating costs from other income sources or savings until the business breaks-even (typically 2-3 years)
• What types of customers will be attracted to your property? Are they readily accessible? Are there enough of them to sustain your business?
• Where and how will you find your customers?
• What knowledge and budget do you have at your disposal to market your accommodation property?
• Will your accommodation property represent quality and value for money?

Meeting Government requirements

Your main local, state and federal Government requirements are as follows.

Applying for a planning permit

To set up a new business, undertake land or building development, or change the purpose of a property, your first step is to apply for a planning permit from your local council. The planning permit provides evidence that the council has given you permission to develop your property.

Tip for B & B Owners:

A planning permit is usually not required for a Bed & Breakfast accommodating five guests or less, but registration is still required.

Do I also need a building permit?

If your development involves construction, demolition, alteration or extension of a building, you will probably need a building permit. This can be issued by either your local council building surveyor or a private registered building surveyor.

The building permit gives the surveyor’s permission for building work to go ahead and ensures that building regulations are followed. If you are unsure if you need a building permit, contact either your council building department or the private registered building surveyor of your choice.

Tip: 

A building permit is usually required for a pool or spa more than 300mm deep, and for the installation / alteration of a pool or spa safety barrier.

Registrations with your local council

• Registration of Prescribed Accommodation Under the provisions of the Health (Prescribed Accommodation) Regulations 2001, an accommodation business will need to apply to be registered with its local council. The application must include a plan of the premises, drawn to a scale of not less than 1:100, and showing the proposed use of each room.
• Registration of Food Premises Under the Victorian Food Act 1984, an accommodation business that provides food also needs a Registration of Food Premises from their local council. Contact an Environmental Health Officer from your council health department who will take you through the registration process, and ensure you comply with state and federal legal obligations.

Further licences, registrations and permits

Any further licences required will depend on the activities to be included in your business operations. As an example, a motel with a restaurant is likely to need:

• to register a business or company name: business name registration with Consumer Affairs Victoria, or company name registration with the Australian Securities and Investments Commission.
• to register for tax: Tax File Number, Australian Business Number and GST / PAYG withholding registrations from the Australian Taxation Office.
• to sell and serve alcohol: a planning permit from the local council and general liquor licence from Consumer Affairs Victoria.
• to play recorded music: music licences from the Australian Performing Rights Association and Phonographic Performance Company of Australia.
• to have tables and chairs on the footpath: a permit to establish an outdoor eating facility from the local council.

Make the job easy – use BLIS

The easiest way to identify the range of licences, registrations and permits you will need is to use the Business Licence Information Service (BLIS).

Go to www.business.vic.gov.au/blis, click ‘Search the Victorian Business Licence Information Service (BLIS)’, choose the report type you want, and search for ‘tours’. BLIS will create a report of your relevant licences, application forms for those licences and details of the authorities you will need to contact.

Insuring your business and planning for growth

Insuring your business

As well as insuring your premises and assets, the following additional insurances can be critical for touring businesses.

• Public liability of at least $10 million to cover paying customers
• Product liability to cover prepared food or other products offered to guests
• Motor vehicle insurance
• Personal injury and/or income protection, especially if WorkCover is not applicable to your business. Personal injury and income protection are often taken out by sole traders and partnerships.

Tip for B & B Owners:

The public liability part of a Home and Contents policy is void when a business is started on the premises. Additional insurance is essential.

Learn more about this vital aspect of operating a tourism business

Accreditation

Accreditation is a set of industry standards established by the tourism industry to a model for better business practice and customer service. In other words, accreditation provides business operators with a guide or outline of industry requirements to help them plan, develop, improve and document their business practices and procedures.

Tourism Accreditation Board of Victoria Inc

The Tourism Accreditation Board of Victoria Inc (TABV) administers the accreditation program in Victoria.
TABV contact details: Address: Level 2, 10 Queen Street, Melbourne, VIC 3000
Phone: (03) 9620 4199
Email:
Website: www.tourismaccreditationvic.com.au

Seek Advice

Professional advice sought at this stage can save money and heartache down the track. Accountants, solicitors, business advisors, management consultants and experienced tourism staff can be sourced to provide objective and realistic advice. Don’t let your heart rule your head!

Planning for growth

Once you’re established, you need to plan for growth. Use the following contacts list to plan and develop an outstanding Victorian touring business.

Tourism Victoria’s online tourism excellence modules will also be an invaluable source of information as you proceed down the path to profitability.

View all the Tourism Excellence modules

View module 3 ‘Business Excellence’