Understanding what is a considered an accommodation business in Victoria will help you decide the actions you will need to take.
In Victoria, the legal definition of an accommodation business is detailed under the Public Health and Wellbeing Regulations 2009.
Businesses covered by the Prescribed Accommodation Regulations are:
- bed and breakfasts (B&B) accommodating more than 5 people
- hotels and motels
- guesthouses and boutique hotels
- self-contained accommodation
- farm stays.
Businesses not covered by the Prescribed Accommodation Regulations are:
- caravan parks
- public hospitals and nursing homes
- retirement villages
- premises where 5 or less people can be accommodated.
Early stage
Before commencing an accommodation business, consider the following questions regarding the type of property you intend to establish.
- 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 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 two to three years?
- What type of customers do you want to attract to your property?
- Are customers readily accessible?
- Are there enough customers 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?
Next stage
Once you have developed a business plan, you will need to obtain registrations and licences for certain activities and apply for permits.
To find out which registrations, licenses and permits you need for your accommodation business, use the Australian Business Licence Information Service (ABLIS).
Common types of registrations, permits and licences required for accommodation businesses
Registration of Prescribed Accommodation
Under the provisions of the Public Health and Wellbeing Regulations 2009, an accommodation business will need to be registered with its local council. As part of the registration process, you must include a plan of the premises, drawn to a scale of not less than 1:100, and show 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 to ensure you comply with state and federal legal obligations.
Planning permit
When you set up a new business, undertake land or building development, or change the purpose of an existing property, it is essential to apply for a planning permit from your local council. Planning schemes regulate the use and development of land. A planning permit provides evidence that the council has given you permission to develop your property.
Make an appointment with a council planning officer who will take you through the application process. You will be advised on the zoning of your land and any other local planning conditions that apply to your development.
Bed & Breakfast owners
A planning permit is usually not required for a Bed & Breakfast accommodating five guests or less, but registration is still required.
Building permit
If your development involves construction, demolition, alteration, or extension of a building, you may need a building permit. A building permit 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 engage the services of a private registered building surveyor.
Permits for pools and spas
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.
Outdoor dining and street trading permit
If you decide to have furniture such as tables and chairs on the footpath or establish an outdoor eating facility, you'll need to obtain a permit from your local council.
Music licence
If your business is playing recorded music for commercial use, you may need to obtain music licences from the Australian Performing Rights Association and/or Phonographic Performance Company of Australia.
Research
Accommodation data is available from the Research and insights webpage.
Insuring your business
In addition to insuring your premises and assets, the following type of insurances can be critical for accommodation businesses:
- Public liability of at least $10 million to cover paying guests and visitors.
- Product liability to cover prepared food or other products offered to guests.
- Motor vehicle insurance if your vehicle is used for business purposes.
- 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.
