Article - How to Deal with Common Challenges in Hotel Industry PDF

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How to Deal with Common Challenges in Hotel Industry? [Updated for 2020] Last modified on November 11, 2020 by Snehal Mistry 8 min read

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Not all the challenges in hotel industry are unique, but many are common in hospitality as well as in other industries. Are you frustrated and truly wish to overcome the challenges in hotel industry? Don’t fret! Despite a volatile market, year-on-year you’re witnessing a rise in travelers globally who aim to get the best hospitality services at the best price. A high tourist influx makes travel and hospitality industry very lucrative business which always have something new to offer to guests in every age.

Why should you know the challenges in hospitality industry? To keep your hotel running, and in fact prospering. Simple. You need to imbibe new technologies, implement strategic decisions on the basis of data collected from disparate online sources and upturn your hotel business.

Despite hospitality being a profitable business, hoteliers shared many pain points with us; out of which a few major hotel management problems and solutions are discussed here:

1. Hiring and retaining the staff 2. Change in marketing trends and dynamics 3. Operational issues 4. Rising cost of daily consumables 5. Housekeeping issues 6. Change in guest expectations 7. Irregular cash inflows 8. Data security challenges 9. Maintaining online reputation 10. Losing loyal customers 11. Change in technology 12. Hotels are not data driven 13. The growth of local hospitality hosts and rising competition 14. Restoring business post natural calamities and crisis Let’s explore them in detail.

1. Hiring and retaining the staf Challenge: Every hotel requires quality staff at all the 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 major challenge in 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 with their jobs and instill a sense of responsibility in their minds.

2. Change in marketing trends and dynamics Challenge: Change in the advertising and marketing trend often creates a problem for the hoteliers. The traditional marketing methods aren’t that effective now. So, for those who have always stuck to the old-school ways, this poses as one of the biggest challenges of 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.

3. Operational issues Challenge: There are countless operational challenges in hotel industry. Ranging from reservations management, attending 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 a 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 have risen steeply in the last few years. While that has affected all the industries, but it takes a huge portion of 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 on stock and reduce the 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. It’s a need that remains on top all the time. A majority of hotel guests would prefer a clean room over complimentary amenities, any day. If you think about it, an unclean and messy room is also a common guest complaint. But, hoteliers tend to miss this aspect among other operations. Solution: Housekeeping challenges in hotels need to be managed well with effectual strategies and thought process. The housekeeping process needs to be aware of the clean and dirty rooms and constantly maintain common areas (especially post this pandemic). 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 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 so that you can prepare yourself well in advance. This way, you can easily avoid challenges in housekeeping operations.

6. Change in guest expectations Challenge: Change in guest expectations is one of the biggest problems in the hotel industry. You’ve witnessed that nowadays guests demand a lot more from the hotel. Free WiFi, entertainment system, unique stay experience, and swift check-in check-out services. Owing to the COVID19 pandemic, they’ll also be expecting contactless hotel services to ensure a safe stay. Certainly, it’s quite difficult to abide by these demands because of resource or capital bandwidth, but it’s going to be imperative to do it. Solution: So, contactless hotel services can be provided with the right technology. Consider deploying a self-service guest portal which will facilitate quick check-in check-out services, share location to your property, and even let guests request for 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 on how to provide contactless guest journey at your property.

7. Irregular cash inflows Challenge: One of the major challenges in hotel industry is the credit menace. Dealing with parties who pay after a period of 30, 60 and 90 days or even later. While these type of dealings are bigger,

they don’t help much during cash crunch. On top of that, many payments are delayed or go in bad debts. 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 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.

8. Data security challenges Challenge: The question of security is not a new one. While our data security methods have advanced considerably, but so have been 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: First step to take towards 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 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 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.

Download FREE Hotel Review Response Templates

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 are 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 package. 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 as 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 out there do not rely on any surefire data for taking business decisions. And because of the decisions based on assumptions, many hotels are forced to close down in a short span. For instance, business decision to spend for promotions on OTAs, interiors, room rate, room type aren’t decided on the basis of actual statistical reports. Solution: In order to fight one of the prominent challenges in hotel industry, you are required to use a software that‘ll give you all the business insights. It can help you in making informed business decisions and save on an 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 number of property owners are renting out their room or property occasionally. Homestays and vacation rentals promise an authentic local experience besides being convenient. Owing to which, travelers prefer to choose those homestays over hotels and resorts. Other than that, new hotels are entering the market everyday. This growing number of homestays and competition is one of the challenges in hospitality industry of 2020.

Solution: First and foremost, a 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 hospitality industry. The whole world shut down travelling during the COVID19 outbreak, because of which the hotel industry also had to shut down its operations. Cancelled reservations, indefinite lockdowns, shut down 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 even a 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 upto us on how we see these challenges, learn from them and come out even stronger 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 COVID19 survival kit for hotels.

Having gone through the above points you can now have a clear idea as to which of the challenges in hotel industry do YOU face. Determining those, you can work on tackling them. If you notice, regardless of any hotel problems and solutions, the most commonly mentioned term is to choose the right hotel software....