Crowdfunding is not a new concept. Crowdfunding gives a company or an individual the chance to fund a project with small amounts of money by a large number of people via the Internet.

Sites such as Kickstarter and IndieGoGo have sparked the interest in network fundraising. In March 2014, Kickstarter passed $1 billion in contributions to its campaigns, and $663 million of that total came from contributors in the U.S. Now crowdfunding is finding is gaining popularity in real estate — specifically hotels.

Hard Rock Hotel in Palm Springs, California, is looking to become the first hotel in the industry to raise money through crowdfunding. Their goal is to raise $1.5 million, which would finance new entertainment acts, expand the spa, furnish the pool and help them to open a nightclub.

"We expect a fairly large amount of investor interest because we have many fans of the hotel and the brand," said Andy Carpiac, president of the Calabasas and majority owner the Hard Rock Hotel. "They come here and stay with us, they spend money here, they bring their friends and family and act like real owners, which they should. It benefits them and it benefits us."

Unlike the criteria for most Kickstarter campaigns, Hard Rock Hotel is a unique one. For this particular crowdfund, investors have to be "accredited," which is determined by the rules and regulations of the U.S. Securities and Exchange Commission (SEC). According to the SEC, investors have to make $200,000 annually ($300,000 if they are a couple) or have a net worth of $1 million.

It's not all about the money, though. There are some perks for investors who donate at least $10,000. Investors will have free use of the following: hotel owner poolside cabana, 25 percent discount on room rates and a free room upgrade.

But Hard Rock Hotel isn't the only player in this game.

Cotel is what the crowdfunding company Prodigy Network is calling its new project "17John." A cotel is "rethinking the process of conceiving and designing the hotel concept to better meet the needs of the modern business traveler."

Prodigy Network along with PSFK Labs will crowd-design a former apartment building in the financial district of Manhattan, New York, and will turn the building into an extended-stay hotel with its main focus on business travelers.

Unlike the Hard Rock Hotel crowdfund, 17John adds an additional element to the idea of crowdfunding by crowd-designing. Designers were given the opportunity to submit a hotel design that features creative elements suitable for a business traveler. Elements included collaborative/public space, private space and digital services. The contest also included $50,000 worth of prizes.

Prodigy Network is looking to raise $31 million through $100,000 increments to successfully convert the apartment building into a hotel.

Crowdfunding is a new venture for the hospitality industry. Here are some factors to think about if deciding whether your hotel would benefit from crowdfunding.

Use the opportunity as a marketing tool: Crowdfunding allows companies the chance to market their brand to both old and new consumers. An active crowdfunding campaign will inspire customers to learn more about your business. This provides a potential of increase of traffic to both your website and social media outlets. Those who do end up investing will further spread the word by sharing it through their social media outlets and connections.

It could increase your number of customers: Crowdfunding allows people who normally would not invest in business ventures such as hotels to participate. When they do, they will want to see a return. Since they have invested in your hotel, expect to see them more frequently than the average visitor. They may also feel entitled to use your hotel and to bring others.

Listen to your customers and get a sense of creativity: Yes, crowdfunding is generally a way to raise money, but it also provides feedback for your business. 17John is unique because it will be a crowd-designed hotel. This enables the company to have a fresh perspective of elements and designs for the new hotel. That fresh perspective from your new investors can help grow and improve your business with new thoughts and ideas that you may had not thought of before. Investors' contribution of new thoughts and ideas will help grow and improve any business that utilizes the new perspective that are generated.

Chekitan Dev, an associate professor at Cornell University's School of Hotel Administration, told USA Today that it makes sense for the hotel industry to embrace crowdfunding.

"It's the natural evolution of the crowdfunding business into more mature industries," Dev says.