6 Major Problems in the Hotel Industry & Corresponding Solutions

The hospitality industry is one of the world’s fastest-growing and largest industries.

The industry in general and particularly the hotel sector, gets hit hard whenever changes occur. The changes range from shifts in local economies to unpredictable technology to globalization.

Fickle consumer decision-making habits also affect the hotel industry. These explain why most hotel managers and owners lose sleep.

Here’re some important challenges in the global hotel industry and corresponding solutions:

  • Rising competition
  • Irregular cash inflows
  • High construction costs
  • Issues with housekeeping
  • Operational issues
  • Staff hire and retention

Top 6 Challenges in the Hospitality Industry & Corresponding Solutions

Rising competition

Local hospitality industry is experiencing growth and rising competition.

Airbnb and other online travel agencies (OTA) offer property owners with regular guests to stay at their properties or rooms.

As a result, a few OTAs are booming with vacation rentals due to increasing demand for accommodation in this area.

Most travelers prefer vacation rentals for their stay. With new properties opening up daily to offer related services, the global industry is experiencing rising competition for hotels.

Solution

Hotels need to offer something different and significant to lure customers. Consider the following solutions to beat your competition:

Irregular cash inflows

Credit menace is a major issue in the hotel industry.

Hotel businesses deal with creditors who pay for their services after 1, 2 and 3 months, or even later. Although these are usually big deals, they don’t help in times of cash crunches.

Moreover, most payments either delay or become serious debts.

Solution

Launch a digital marketing campaign to get direct bookings with advance payments for quick ROI. This is a good way to get cash reserve for working capital to pay electricity, kitchen and other maintenance bills.

High construction costs

The cost of materials drives construction costs.

Consumer and producer price indices drive the cost of materials. Increase in demand for materials such as steel and iron drive the cost of materials.

Other drivers of construction costs include:

  • The diesel fuel cost for transporting raw and finished products
  • Increasing concrete prices
  • Suppliers of materials
  • Availability of materials

Solution

Ways to deal with high construction costs and driving factors include:

  • Thoroughly valuing engineering project specifications and design.
  • Assessment of materials specifications for cost-effective selections.
  • Use of a qualified project management team.
  • Optimal use of construction area for revenue-generating activities according to space programming and design standards.
  • Increased use of pre-fabricated items in new construction or renovation projects to hasten project development timelines. You can hire a welding company or professional to fabricate certain components for your construction project.

For instance, fabrication professionals can use TIG welders with adjustable voltage to fabricate windows and doors for your projects. Designed with excellent duty cycle, MIG welders would help produce similar outcomes.

Welding and fabrication services can also help reduce your construction costs.

Monitor changes in the local construction markets on a consistent basis to keep abreast with changing labor and materials costs. Proper planning also ensures that a construction project is finished on-budget and on time.

Issues with housekeeping

Guests demand cleanliness in hotels.

Guests recommend clean, neat and organized hotels to their networks all the time. They opt for cleanliness in rooms instead of free internet access and luxuries among other amenities.

Solution

Your hotel’s housekeeping department is responsible for keeping your business premise comfortable, clean, tidy and sanitary at all times.

Hotel housekeepers should know the rooms that need cleaning to make them clean and ready for new guests.

A hotel software helps keep track of guest check-ins and check-outs, including the rooms that need cleaning and those available for next guests.

The software helps overcome housekeeping issues in terms of operations.

Operational issues

The hotel industry experiences several operational issues.

They range from performing front desk operations to housekeeping to attending to guests to reservations management.

However, syncing all hotel tasks is a major issue. This leads to customer dissatisfaction.

Solution

An integrated hotel PMS system can help overcome operational issues. The system syncs all departments in the hotel to streamline operations.

It eases communication across departments.

Some benefits of the PMS system include:

  • Better housekeeping service
  • Improved check-ins and check-outs
  • Effective management of hotel distribution
  • Better customer data management
  • Enhanced hotel revenue management

Staff hire and retention

Hotels need staff to work on various tasks in the business. They include:

  • Housekeeping
  • The kitchen
  • Maintenance
  • Administration
  • Front desk

Youths graduating from institutions of higher learning lack skills and experience required in the hotel industry. This explains the need to hire and retain staff at all times.

Solution

Train new workforce graduating from educational institutions to solve this issue. Give your existing employees the feeling of belonging to the company to motivate and retain them. Give them higher responsibilities, benefits and perks to make them feel part of the hotel.