How to Deal with Common Challenges in the Hotel Industry?

Travel and hospitality is a lucrative industry. Over the years, the industry witnessed a tremendous rise in business.

However, despite the gains, inevitable challenges in the accommodation sector make running hotel businesses a little more difficult.

So, if you are frustrated and truly wondering how to overcome these hospitality challenges, then you’re at the right place.

This article talks about all the common challenges in the hotel industry and their possible solutions.

Why Should You Know About All the Challenges in the Hotel Industry?

Running a hotel business isn’t a cakewalk. The level of risk involved is immense.

Therefore, hoteliers must keep an eye on every hurdle that comes their way.

Numerous hotels around the world tend to overlook most of the challenges. As a result, they face serious repercussions.

Let me share an incident.

There’s this hotel I visited in Prague. The property was just marvelous and I was loving my stay. On day 2 of my stay, I met the hotel manager and had a colloquy. And I got to know a lot.

They had to close two of their POS outlets. Reason? The system they were using to manage the outlets was sort of old school and didn’t have the automation aspect.

Initially, it didn’t seem to be a big issue, but when they had to perform certain tasks manually, discrepancies increased, and at one point it went out of hand.

Now, if you still think that you don’t have to emphasize every challenge, then that’s not correct. To keep a hotel running; in fact, prospering, an all-around inspection of all the challenges of a hotel business.

Common Challenges in Hotel Industry and Their Solutions

You don’t need rocket science to overcome challenges. Rather, you need to have a strategic approach.

Over the years, many hoteliers shared many pain points with us. So, in this section, we address a few global issues and challenges in the hospitality industry and their solutions.

1. Hiring and retaining the staff

Challenge

Hiring and retaining staff has always been one of the most common problems in the hospitality industry.

Every hotel requires quality staff on all fronts; be it administration, maintenance, kitchen, housekeeping, or frontdesk. Lack of skill in the educated youths graduating from education houses is also proving to be a major challenge in the hotel industry.

Solution

Training the new workforce on a regular basis is the only remedy available. Retaining a qualified staff requires you to employ a few tactics. For example, cultivating a feeling of belongingness (culture) and value for the team members will make them attached to their jobs and instill a sense of responsibility in their minds.

2. Change in marketing trends and dynamics

Challenge

Marketing is one of the most common challenges faced by the hotel industry.

Changes in the advertising and marketing trend often create problems for hoteliers. Also, traditional marketing methods aren’t that effective now. So, for those who have always stuck to the old-school ways, getting the strategy right is one of the biggest challenges of the hospitality industry. 

Online marketing is a surefire method, though it would take years for hotel owners to establish their strength. Online deals are booked by genuine guests and major transactions are paid in advance. 

Solution

Engaging your guests on social media, messaging apps, and other online sources can work wonders and give you results in a few months. Implementing effective digital marketing strategies is a strong solution to such issues in the hospitality industry. Be consistent and patient with whatever tactics you apply. It is inevitable that with the right strategies.

3. Operational issues

Challenge

There are countless operational challenges in the hotel industry. Ranging from reservations management, attending to guests, performing all front office operations, maintaining cleanliness in hotel rooms and premises, and more. However, hotel departments often fail to perform all tasks in sync which leads to chaos and customer dissatisfaction.

Solution

Besides operations, front office problems and solutions are connected to an integrated hotel PMS system. The faster you adopt it, the better it is for your property. Your operations are automated and departmental functions are synced with a PMS because it simplifies communications to a large extent.

4. Rising cost of daily consumables

Challenge

Price inflation of daily use products, eatables, and other supplies has risen steeply in the last few years. While that has affected all industries, it takes a huge portion of the issues and challenges faced by the tourism and hospitality industry.

Solution

A visible solution to this would be to keep a constant check on the inventory, control stock, and reduce wastage as much as possible. Consider implementing useful cost-saving strategies at your property, which would help you manage the rising costs.

5. Housekeeping issues

Challenge

Cleanliness is a basic requirement of every guest. In fact, you’d also ask for a clean and tidy hotel room when you are traveling. A majority of hotel guests would prefer a clean room over complimentary amenities, any day. 

Also, if you think about it, an unclean and messy room is also a common guest complaint.

But there are times when it becomes a little difficult for hotels to stay true to this. After all, there are various housekeeping challenges involved and strategies are needed to be made to cope with them. 

Solution

Housekeeping challenges in hotels need to be managed well with effective strategies and thought processes. The housekeeping process needs to be aware of the clean and dirty rooms and constantly maintain common areas. Do highlight these measures on your website and social media handles to gain your guests’ trust.

For example; You can track both – arrival and departure list of guests through the hotel software and can update the housekeeper to clean the room of all the guests who will check-out from the hotel. Moreover, whenever any guest check-in and ask for a room, you can easily check whether a housekeeper has cleaned the room or not with the help of the system. 

This is the best way to manage tasks, and keep track of the arriving and departing guests, and you can prepare yourself well in advance. This way, you can easily avoid challenges in housekeeping operations.

6. Change in guest expectations

Challenge

Changes in guest expectations are one of the biggest hurdles in the hotel industry. You’ve witnessed that nowadays guests demand a lot more from a hotel. Be it free WiFi, entertainment system, unique stay experience, or swift check-in check-out services.

And lately, people have also started expecting contactless hotel services to ensure a safe stay and eliminate their dependency on hotel staff. Certainly, it’s quite difficult to abide by these demands because of resource or capital bandwidth, but it will be imperative to do it.

Solution

So, contactless hotel services can be provided with the right technology. Consider deploying a self-service guest portal that will facilitate quick check-in and check-out services, share the location of your property, and even let guests request pick-up and drop-off services. Keep yourself updated with the latest hotel industry trends. Doing that will help you meet the changing guest expectations in a better way.

Check out the video below, to get an idea of how to provide a contactless guest journey at your property.

7. Irregular cash inflows

Challenge

One of the major challenges in the hotel industry is the credit menace. Dealing with parties who pay after 30, 60, and 90 days or even later. While these types of dealings are bigger, they don’t help much during a cash crunch. On top of that, many payments are delayed or go into bad debt.

Solution

Consider changing vendors and suppliers following a long payment term. Or strike a deal with them to collect their due payments in installments rather than in one go. This will keep your boat sailing for a longer duration. On top of that, you can launch an online marketing campaign to attract bookings, since these strategies provide a quick ROI.

This way, you save on hiring extra personnel for payment collection and even get to pay your bills on time. In short, you have an ample cash reserve for working capital. And that’s the best thing you can do about dealing with such hotel industry challenges.

8. Data security challenges

Challenge

The question of security is not a new one. While our data security methods have advanced considerably, so have the possibilities of data leaks and virus attacks. Threats of digital data theft and confidential data leaks are a matter of concern for hoteliers globally.

Solution

The first step to take toward secure data is to ensure proper data storage. Stop dealing with excel sheets and registers. Incorporate a secure hotel technology that prevents your data leaks. Technology today is PCI-DSS compliant as well as HTTPS secure, leading to better data encryption. This way you build your hotel’s credibility to bring in more guests.  

9. Maintaining the online reputation

Challenge

Today, internet-savvy visitors look for the brand reputation first before booking a hotel room. But, maintaining an online reputation is another big challenge that hotels often face. However, this has not been a current issue in the hospitality industry. Reviews and reputation have been neglected across all industries since the beginning. Little do they know, that an unmanaged reputation leads to poor brand image.

Solution

According to a survey, 93% of travelers check hotel reviews before booking a room and 33% of guests do not prefer to book a hotel with no reviews. Moreover, it is always crucial to track what guests are saying about your brand and the services you provide. Review management systems help you monitor, manage and respond to your online reviews – regardless of the platform and language.

I also have something to assist you in responding to reviews.

10. Losing loyal customers

Challenge

Since various hotels are constantly pouring in attractive offers, guests tend not to be limited to a single brand. Rather, they’re open to options; especially if you fail to connect and engage with them personally, and deliver a memorable guest experience.

Solution

Running loyalty programs is the MOST practical way to increase your loyal customer base. These include offering amenities, discounts, and reward points to guests against their membership. So, even if they’ve stopped using the services, you can approach your guests and offer them deals or packages. At the same time, do not forget to consider implementing ways to increase repeat guests at your hotel.

11. Change in technology

Challenge

The advancements in technology are altering every aspect of our daily lives. Gone are the days when guests used to wait for hours or a day to receive answers to any query. Today, customers are expecting a fast response and services from hotels. Such constant changes are extremely arduous to adapt to, which poses a challenge.

Solution

Hotels have begun tailoring guest experiences with chatbots. Chatbots allow hotels to respond to visitors at once, answer every query instantly, and more. This further increases hotel bookings, and revenue.

12. Hotels are not data-driven

Challenge

You are well aware that some hotels do not rely on any surefire data for business decisions. And because of the decisions based on assumptions, many hotels are forced to close down in a short span.

For instance, business decisions to spend for promotions on OTAs, interiors, room rates, and room types aren’t decided on the basis of actual statistical reports.

Solution

In order to fight one of the prominent challenges in the hotel industry, you are required to use software that‘ll give you all the business insights. It can help you in making informed business decisions and save on extravagant spending. Using the complete data analysis tool, you can even apply proper revenue management strategies to earn higher revenue.

13. The growth of local hospitality hosts and rising competition

Challenge

These days, more and more property owners are renting out their rooms or property occasionally. Homestays and vacation rentals promise an authentic local experience besides being convenient. Owing to this, travelers prefer to choose those homestays over hotels and resorts. Other than that, new hotels are entering the market every day. This growing number of homestays and competition is one of the challenges in the hospitality industry of 2022.

Solution

First and foremost, solid competition analysis is needed. You need to know how your competitors are doing, monitor their strategies, and then devise better plans for your property. On top of that, you need to offer something significant to attract your guests. Constant innovations and personalized services are eventually the only way to beat the competition.

14. Restoring business post natural calamities and crisis

Challenge

So, I think this is a recently faced challenge (or rather, ISSUE) in the hospitality industry. The whole world shut down traveling during the COVID-19 outbreak, because of which the hotel industry also had to shut down its operations. Canceled reservations, indefinite lockdowns, and shutdown hotels; this was probably the worst hit times for the tourism and hospitality industry.

While it is a challenge to survive these times, it is an even bigger challenge to come out of these times as a winner. And the hardest to restore the business in these uncertain times.

Solution

To be honest, none of us would have imagined a situation like this, where we would be fighting for our survival. But it is entirely up to us how we see these challenges, learn from them and come out even more potent than we were.

Businesses took this opportunity to evolve and innovate. and prepare themselves for the future. While these are all-natural calamities and not in our control, we can surely work on optimizing our operations and ensuring that our business stays alive amid the chaos. In the current times, you can use and implement strategies mentioned in our COVID-19 survival kit for hotels.