How to start a guest house: the systems from day one.
A practical start-up checklist for a guest house or small hotel, from licences and rates to the systems that save you from moving off paper later.
By the Tivuzo team · Updated
To start a guest house: check zoning, licensing and registration with your tourism authority and local council; prepare rooms to a clear standard; set room types, rates and policies; line up suppliers for breakfast, cleaning and laundry; choose how guests will book and pay; and set up one system for bookings, billing, stores and accounts from the first day, so you never have to move from a notebook later.
Before you open
- Business registration and tax registration (including VAT if you will pass the threshold)
- Licences and permits: tourism authority registration, county or council business permit, health and fire certificates
- Insurance: buildings, contents, public liability
- A clear policy sheet: check-in and check-out times, deposits, cancellations, children, pets
Rules differ by country and town. Check the current requirements with your tourism authority and local council, and with an accountant for tax. Country pages: Kenya, Tanzania, Uganda, Rwanda.
Rooms, rates and meal plans
| Decide | Example |
|---|---|
| Room types | Standard double, twin, family room |
| Base rate per room type | Standard double KSh 5,500, family room KSh 8,000 |
| Who is included | 2 adults; extra adult KSh 1,500; child under 12 KSh 750 |
| Meal plans | Room only, or bed and breakfast at KSh 800 per adult |
| Seasons | Higher rates in festive weeks and peak months |
| Policies | Deposit 30%; free cancellation up to 7 days before arrival |
First suppliers and stores
Even a small guest house buys every week: breakfast food, drinks, amenities, cleaning chemicals, gas and laundry. Agree prices with two suppliers for the main items, keep a small store with reorder levels, and record what you issue to the kitchen and rooms. That is how you will know your food cost and cost per occupied room.
The systems to set up on day one
- BookingsA room planner that refuses double bookings, with each booking's source.
- The billBreakfast and extras on the guest's bill; deposits; a clear statement at check-out.
- PaymentsA payment method for M-Pesa or other mobile money, card and cash, each with its reference.
- HousekeepingRoom status shared with whoever is at reception.
- StoresA list of what you buy, where it is kept and when to reorder.
- AccountsRevenue, costs, VAT and profit, monthly.
Starting on paper and moving later means doing setup twice. Tivuzo covers all six for $13 per user per month; a guest house with three people logging in pays $39. See guest house software.
How guests will find you
- A simple website with rooms, rates, photos and a phone or WhatsApp number
- Google Business Profile with photos and reviews
- One or two OTAs, knowing their commission
- Local companies, NGOs and tour operators for weekday business
See how to account for OTA commissions.
Numbers to watch from month one
| Number | Why |
|---|---|
| Occupancy, ADR, RevPAR | How full and at what price. |
| Cost per occupied room | What each night costs to service. |
| Food cost % | Breakfast and meals under control. |
| Cash: money owed and bills due | Staying open. |
Read occupancy, ADR and RevPAR explained.
Starting a guest house
How many rooms does a guest house need to be viable?
It depends on rates, occupancy and costs in your area. Build a simple budget: rooms × expected occupancy × ADR against wages, supplies, utilities and loan costs.
Do I need software for a small guest house?
If more than one person takes bookings or handles money, yes. See the best PMS for small hotels.
Should a guest house register for VAT?
Only if your turnover passes your country's threshold, or if registering voluntarily makes sense. Ask an accountant.
What policies should a guest house have?
Check-in and check-out times, deposits and cancellations, children and extra beds, smoking, pets, and damages.
Last updated by the Tivuzo team.