13 Strategies to Turn Around A Failing Hotel Business

Every business involves risks. And, it is uncertain when you hit the downfall. 

From welcoming guests to observing a low influx, you never know where you might have taken the wrong path. 

And, such a breakdown, smashes you both ways – mentally and financially.

(This was the scenario for a lot of hoteliers in 2020 😞 .)

So to keep you well prepared and save your hotel business from failing, I have penned down some extremely useful tips below.

But first, let me tell you

What can be the various reasons for a failing hotel business?

The word “closing” itself leaves me with a teary eye. And, we cannot stop or change something that is about to happen.

Besides, businesses don’t fail out of luck. There are several factors involved that turn you into a loss-making company from a profitable one. 

And before you reach a point where it all seems out of motion, let’s understand the reasons that can head you to closure.

I have covered some of the major ones below:

More expenses, less income:

When your expenses exceed the income, it is natural that your business will suffer from a loss. And this is one of the primary reasons why hotel businesses fail. Thus, make sure to reduce your costs and hike your profits before it’s too late.

Low bookings and guests influx:

For a hotel, everything revolves around guests. They are the reason why your business exists. So, if you observe low occupancy even during the peak seasons, then make sure you start implementing strategies to attract more guests.

Poor guest experience and bad reviews:

Bad customer service comes with dangerous side effects on your business. If you come across any negative reviews, start applying strategies to improve your customer experience. In case you fail to do so, it will harm your hotel’s reputation; leaving a bad impression on your future visitors.

Installing expensive technology:

Technology simplifies your hotel’s complex operations, but make sure you are getting enough ROI from it. It is very important to note that expensive DOES NOT mean EXCELLENT! So adopt a solution that delivers you the right returns and better guest experiences. 

Unfavorable market conditions:

Market conditions are unpredictable and you have no control over them. But, you should always have a strategy for the worst times. I have some exceptional cost-saving ideas that can help you overcome this.

Using old hotel management practices:

Technology and trends look fresh until they are not outdated. Likewise, the hospitality industry witnesses various trends with rising guest expectations every day. And, if you fail to adopt those, they’d choose your competitors over you.

Each of these and several other reasons can largely affect your business’s growth. If you’re not taking a proactive approach to controlling your expenses, your hotel will not generate higher profits.

So, better late than never, be well prepared to take the right steps in advance.

Let’s have a look below to implement them at your property. 

How to save your hotel business from failing?

It’s always good to have a plan B when plan A doesn’t head in the right direction. Likewise, if your hotel is not achieving the desired goals, it’s time to adapt creative strategies and turn things around.

Here are the smart ways through which you can lower your costs and achieve higher business profits.

1. Go low on marketing expenses

Marketing for your hotel business is surely going to give you better returns. But, when you are low on profits, this is one thing that you can consider skipping on. 

Instead, you can switch to no-cost marketing activities from paid ones (like ads). Also, consider targeting your audience directly from social media platforms.

Join (suitable) groups on Facebook and LinkedIn. Start posting about your offers, discounts, and the various facilities that you provide at your property.

I’m sure this will help you generate more business plus improve the brand awareness of your property.

2. Revamp your pricing and cancellation policies

Good pricing and flexible cancellation policies are always good deals for your guests. If you plan this right, what more would they want from you?

Pricing involves a lot of factors. And, if you don’t want to lose your customers, it is necessary to set effective pricing strategies to enhance the overall profit of your business.

All the more, ensure that your cancellation policies are in line with your hotel’s pricing. Because no guest would want to lose their money if they are unable to visit your hotel.

These are very crucial elements that you should often track. Especially during an unprecedented crisis, at the time of festivals, events, long weekends, and on the whole.

3. Take ideas from your hotel staff

When things get complicated, it becomes hard for you to come up with new ideas and draw a conclusion on the ongoing hurdles.

Here’s where your hotel staff can be your best friend to help you stay afloat during tough times.

Do consider their views and plan out new strategies. Because they are the ones who are actually on the frontend of your business. 

Further, if you deem it right, get in touch with industry experts to seek advice for your business growth.

4. Implement low-season tactics

Low seasons can make or break a property. If your budgets are already tight, any significant dip in bookings can largely affect your business revenue.

But implementing the right tactics in advance can help you beat them. Smart ideas, planning, and a bit of pop psychology can get you more guests even during the low season. 

Personally, I prefer to visit locations when there is an off-season. Because there are two major benefits – low prices and no overcrowding. 

I’m sure there must be many travelers like me that would help you here. So make sure you target the right audience during such times and hike your profits.

5. Take advantage of underutilized spaces

Look into every nook and corner of your hotel and find spaces that are not utilized or not used often. 

Using underutilized spaces to enhance your hotel’s revenue during your low-profit days can be a good way to earn a side income. 

Make use of such spaces for recreational activities that do not include much set-up costs. Namely - yoga, meditation, family gatherings, and such likes.

However, these might not be a permanent set-up at your hotel but can work as a promotional strategy to meet your expenses.

6. Host events and upsell services

Host events like music gigs, concerts, festivals, and parties, or collaborate with influencers. This can be a win-win strategy for both – your hotel and its fame.

Influencers often have a huge fan base that attracts more guests to your property through their presence. 

Besides, these events allow you to upsell your hotel services like hotel rooms, dine-in facilities, bars, etc. 

You can also offer combo deals at relatively low costs to draw your guests’ attention and thereby meet your business revenue.

7. Make use of social media presence

It is always advisable to follow the trend and stay active on social media platforms. This helps you to increase your bookings and engage more followers.

Besides, these days your guests are more active on social media, exploring every single thing they are looking for.

That is why regular posting, sharing updates, and adapting social media strategies would hugely benefit and promote your property. 

(You can also create a unique hashtag for your hotel.)

I have some ready-made social media post templates that would help you to start with this.

8. Promote cross-resource utilization

Cross-utilization of employees helps you to manage your resources in an effective and profitable way.

It is a method to build your staff with a secondary skillset and broader knowledge to perform activities of other departments as well.  

You may think this will need around the clock efforts from your staff. But, in reality, it will benefit them to know the in and out of your business.  

Besides, it will save you from the extra expense of hiring new staff by training your existing employees with new roles and responsibilities.

9. Run discounts that benefit your property

Discounts!! This word itself has a huge impact on your customer’s minds. It encourages them to make a booking with your property (if they find a good deal).

Running and promoting discounts often have several advantages - better branding, better sales, and better bookings.

That is why you need to be thoughtful and consider a wide range of parameters while offering the perfect deal.

Here’s a definitive guide to hotel discount strategies that will allow you to showcase the best discounts for your property and equally gain you good returns. 

10. Ensure your hotel software fulfills smooth operations

A hotel PMS is the heart and soul of your business. If you are not using an affordable cloud-based system, then you’re missing out on some solid perks.

An automated and streamlined system delivers a great guest experience by saving a lot of your time and effort.

Besides, when integrated with other systems, it reduces the to and fro between departments and boosts staff productivity.

Further, these systems include a mobile PMS that lets you track operations on the go and stay updated on everything.

11. Provide ultimate employee satisfaction

Employees are the right hand in your business. If you keep them happy, they’ll undoubtedly make your guests happy.

First things first, educate your staff and provide them training at regular intervals. Consider their views and in turn, share with them what are your future goals.

This will create a sense of trust and encourage them to serve your guests in the best way possible.

Also, focus on long-term employees by timely delivering rewards for their performances. This will help you to have an experienced set of team on board. 

12. Adapt to the changing trends

You can’t get ahead if you don’t know where the industry is going and what your guests’ expectations are. So make sure you’re aware of the upcoming hotel industry trends.

Being the first to offer new services, you are one step ahead of your competitors to gain more guests and business revenue.

You should also consider switching to modern practices from traditional ones and revamping your hotel premises (in case it requires an update).

Such changes will save your hotel business from failing, making it the #1 preferred destination for your guests. 

Thus, stay updated on what’s happening, how the industry is reshaping, and what can empower you to deliver a better guest experience.

13. Promote good hotel reviews

Reviews are a great way to attract guests and boost your hotel’s reputation. If you notice a guest is happy with their stay, never miss a chance to take their feedback on public platforms.

(Let me tell you, mouth-to-mouth advertising works the best!)

Highlight excellent reviews on the right channels, like a website, social media, Google, etc. It will give you a chance to showcase the uniqueness of your property.

To mention,  93% of people check hotel reviews before booking a room.

And, not only taking reviews but also its timely response (irrespective of whether it is a negative review); plays an essential role in your business.

I have some really useful review response templates (for free) that might help you.

Turning around an underperforming hotel is quite challenging, but not impossible. By far, I hope I was able to give you a solution to save your hotel business from failing. 

Let’s clear a few of your doubts now.

FAQs

Half information is always harmful. Therefore, I have listed a few questions that might have popped into your head by now.