Crowdfunding for Hotel Businesses: Revolutionizing Hotel Entrepreneurship

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Crowdfunding for Hotel Businesses: Revolutionizing Hotel Entrepreneurship


Crowdfunding for Hotel Businesses: Revolutionizing Hotel Entrepreneurship

We’ve seen all kinds of products launch on Kickstarter and Indiegogo, but hotels are a new topic we’re excited to discover. Crowdfunding for hotel businesses is relatively fresh, and on the rise, so we wanted to touch upon the subject to guide you.

Crowdfunding has its specifications for hotel businesses, including being highly localized and selling an experience rather than a product.

Only 7 hotels have launched on Kickstarter and 21 on Indiegogo. All of them failed except 4 on Indiegogo, so it’s clear that this sphere also comes with challenges.

In this guide to crowdfunding for hotel businesses, we’ll explain why you should choose crowdfunding, discuss its benefits for hotels, explain how you can do it, and address possible challenges you might encounter.

If you want to use an alternative funding method to launch your hotel business, you’re in the right spot. Grab your pen and paper, and let’s jump right in.

Why Choose Crowdfunding for Hotels

If you’re unfamiliar with crowdfunding, here’s the gist – instead of raising a lot of money from a few investors, crowdfunding allows you to raise small amounts from many. These small-budget investors are called backers, and you’ll usually give them perks for backing your idea, such as a discount before you launch.

Crowdfunding for products is straightforward; established best practices exist, so it’s like a polished rock. Now, the tables turn when it comes to crowdfunding for hotel businesses.

Hotel Crowdfunding Campaign

Crowdfunding is a highly untraditional option for funding hotels, so why should you consider it? If it plays to your advantage, it can also pay off greatly. The reward increases with the level of risk.

Let’s discuss the three reasons you should choose crowdfunding for hotel businesses.

Highly Localized

Crowdfunding for hotel businesses is highly localized. If you choose to target the most extensive global markets for a physical product with a prototype, hotels need to target a more narrow audience.

If your hotel is in California, you’ll need to target the surrounding states to increase your chances of getting a booking. After all, the closer the backer, the higher the chance of them following through and showing up at your hotel when it’s ready.

Considering this specification, you’ll be good to go if your team is masterful in local promotions.

Working with Local Media

Another reason why crowdfunding for hotel businesses can be influential is the need to work with local media. Unless you’re building your hotel in New York or another global hub, you’ll likely find communication and engagement with local media sources easier.

Since PR plays a huge role in building buzz around your launch, this is a significant benefit you get with crowdfunding for hotel businesses.

Promoting an Experience vs. Product

Last, you’ll promote an experience rather than a product. It means that it has to be unique and even somewhat weird. If your idea for a hotel is out of the ordinary, this can become a massive advantage.

At the end of the day, if you make people feel powerful emotions, they will not forget you.

Now that you know what shoes you’ll need to fill, let’s talk about the benefits crowdfunding for hotel businesses can bring you.

Benefits of Crowdfunding for Hotel Businesses

When choosing a funding method, you want to weigh the pros and cons to find your best fit. Regarding crowdfunding for hotel businesses, we’ve identified three significant benefits you stand to gain, so let’s jump right in.

Non-traditional Way of Crowdfunding

If you’re planning to build a truly innovative experience for your visitors, why not consider funding it creatively as well?

Crowdfunding is non-traditional, and it’s even more untraditional for hotels. The risk is high, but the rewards will also increase. With crowdfunding, you don’t stand to lose much if you fail.

Community of Supporters

If you choose crowdfunding as your primary tool for raising capital, you won’t simply be getting money. Crowdfunding has tons of benefits, and one of the biggest ones is that it helps you build a giant community of supporters for your idea even before you launch.

Not only will you stand to gain from word-of-mouth marketing, but you’ll also get to know your audience even better. It will help you modify your communication tone to fit the style, and you’ll build something tailored to your preferences.

Market Validation and Feedback

Speaking of building a community that can bombard you with community feedback, let’s also talk about market validation.

If you want us to be honest, there are two ways you should launch an idea – crowdfunding or Both help you validate your market and gather tons of feedback from the general public. Of course, goes a bit further and lets you validate even the colors of your landing pages, but let’s stay on track.

Crowdfunding helps you understand whether or not people are willing to pay for your product. This way, you find out if there is a need or a gap that your solution can fill.

They’ll ask you lots of questions and leave comments recommending that you change one thing or another. That’s what backers do – they guide.

Now, let us get into the juicier things and talk about how you can crowdfund a hotel.

How to Crowdfund a Hotel

Whether new to crowdfunding or not, this small tutorial can help you set up your campaign quickly and easily. Crowdfunding for hotel businesses is fresh, but we have four steps you can follow to optimize your chances of success.

Goals and Objectives

As with any crowdfunding campaign, you’ll first need to set your goals and objectives for this journey. To make it easier, you should find answers to the following questions:

  • How much funding do you need to raise to build your hotel? (This will be your campaign goal)
  • How will you use the funds? (e.g., buying the property, renovating, etc.)
  • When will every milestone be achieved? (Create your timeline)

To be smart about it, make sure your goals are specific, measurable, achievable, relevant, and time-bound. 

Crowdfunding Platform

Once you set your goals, it’ll be time to choose the crowdfunding platform you’ll use. Your choice will usually be between Kickstarter and Indiegogo.

If it were up to us, we’d say that Indiegogo is the better option when crowdfunding for hotel businesses. There have been 21 hotel projects on Insidegogo, and 4 have reached their goal.

It also has an Indiegogo InDemand program, which ultimately allows you to keep raising funds indefinitely. It can also come in handy if you ever encounter budgetary issues.

Creating a Campaign Page

Once you’ve chosen which crowdfunding platform you wish to use, it’ll be time to create your campaign page, write all your copy, make all your 3D renders and visuals, and maybe even invest in a high-quality video to set the mood.

Regarding hotel development crowdfunding, you need to focus on building trust. That is why you’ll need to be crystal clear about your value proposition and give the backers every tiny detail they might ever need (e.g., location, unique features, pricing, layouts of rooms, amenities, the vision, etc.).

Ensure that your campaign page includes every detail a person would see when booking just about any other hotel. This is how you start building trust.

Crowdfunding Hotel Campaign Promotion

Once you have all your campaign page content set up, it’ll be time to promote your campaign. You can divide this into three stages – before, during, and after.

The channels you can use to promote your crowdfunding hotel project should range from social media and content marketing to email marketing and PR.

Before launch, you must focus on crafting stunning marketing materials, including headlines, email content, visuals, and more. It would be best if you also started building buzz around your product with the help of local news outlets and media sources, posting teasers on social media, or using to create an initial customer base.

During the launch, consider hosting a launch event, inviting influencers, and publicizing it widely. Doing the same on social media through posts and news outlets would help.

After your launch, you’ll have limited time to reach your goal, so nurturing and generating leads will be a priority. It would be best if you dedicated yourself to keeping your backers updated on everything going on to foster a sense of community. Email marketing will be your best friend after the initial buzz you generate through PR.

And that’s the gist of everything you’ll need to crowdfund a hotel.

Related: Oculis Lodge: Collecting $1.2M and Redefining Hotel Crowdfunding

Challenges and Limitations of Crowdfunding for Hotel Businesses

Crowdfunding for hotel businesses is not all fun and games. There’s a lot you have to tackle to join the four hotels that succeeded on Indiegogo rather than the 17 that didn’t. That’s why we’re here to help you navigate this challenging path.

We’ve analyzed our learnings from previous experiences and identified 4 of the main challenges when it comes to crowdfunding for hotel businesses.

Backers are Suspicious

Since crowdfunding for hotel businesses is a new concept, backers are still determining whether the hotel will get built. A tech product can have a prototype or a minimum viable product, but a hotel is all or nothing, making it riskier to back.

Only 3D Renders to Show

When doing crowdfunding for a hotel, you don’t have a product or prototype you can show people. It’s all based on 3D renders, so the pressure is high. Your renders need to be realistic and precise to convey the natural feel of the space.

Tough Influencer Marketing

Usually, influencers who promote hotels would want to visit the space, stay there for a couple of days, take pictures, and then show everything to their followers. Again, collaborating with influencers is very tough since you don’t have a physical space yet.

Small Niche

Finding the right audience is vital for crowdfunding for hotel businesses. A backer can’t just be a regular one; it also needs to be someone who will book a hotel. If you find and can reach an audience that matches these criteria, you’ll be golden.


There you go – the complete guide on crowdfunding for hotel businesses. We told you about crowdfunding for a hotel, including its benefits, why and how you should do it, and some challenges and limitations you’re bound to encounter.

If you find that traditional funding methods don’t fit the predisposition of your idea, crowdfunding is always an excellent option for crazy ideas. You’ll need incredible 3D renders, lots of local promotions, and an intelligent marketing strategy to narrate an unforgettable experience (that doesn’t exist yet).

So, take this information to the drawing board, and we hope you’ll become the 5th successful hotel in crowdfunding!

Angel Poghosyan

Angel is a content, marketing, and strategy professional with over 6 years of experience working with startups and businesses across a range of industries. Her expertise lies in social media, tech, etc., and she has developed a deep understanding of these sectors through her work with a variety of clients.

Mushegh Hakobyan

SMM specialist


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