The hotel industry will face many challenges in 2024. It may feel like a daunting task to overcome them. As a Hotel Management Company, we’ve seen how hotels can achieve success by streamlining their processes, using the right tech stack, and adopting a new approach.
Ten challenges and problems in the hotel industry and their solutions
The summer of 2023 will see a surge in tourism as holidaymakers and travelers return to their wanderlust after the travel bans and lockdowns caused by pandemics.
Despite this, there are still many challenges facing the hotel industry. With a strategic approach that is informed, hotel managers are able to meet these challenges and take their business to new heights.
Experience and Personalization: Meeting Modern Guest Needs
Hoteliers can no longer rely on looking the part. Although image, comfort, and nice hotel amenities are important, customers want more from their hotel.
The right data management technology can help you achieve truly personalized service by capturing, storing, and analyzing each customer’s information on a micro level, as well as detecting trends at a macro level. The new battlefields for hotels are experience and personalization. In a fiercely competitive market, the hotelier who can deliver on both sides will win.
The Right Employees to Hire
Hotel hiring is getting harder, from the seemingly lower-skilled positions like servers to the specialist roles such as treasury and accounting employees. It is easy to hire restaurant and bar staff. But finding good wait staff can be a challenge. It is also important to keep them around.
Simply put, it is becoming more difficult for organizations in all industries to retain and hire good employees. This is because workers have become more demanding about what they expect from their employers. Your hotel will be ahead of the competition if you embrace this change instead of resisting it.
Your hotel can retain and attract top talent by offering a career package that includes more than just a salary. The package could consist of real benefits like medical insurance, stock option coverage, travel expenses, etc. In truth, a ping-pong table or some fruit every week is not a benefit, but the bare minimum.
Workers are looking for employers that offer a complete package and that make them feel part of a cause they support. This last point is also related to the first: by having a mission that includes a unique and true experience for guests, workers will feel part of something valuable.
The market and consumer demands are constantly changing.
It is difficult to plan if your market is likely to change. Business is much easier when you can predict the future. The migration to hybrid and remote working has led to a slower recovery for business travel. Only 16% of companies are completely remote. 58.6% percent of the US workforce works remotely. 78% of companies expect this trend to continue. This market trend offers opportunities for those who are willing to embrace it.
Hotels can, for example, offer clients a coworking experience in order to attract customers. Hotel rooms and spaces, such as meeting and conference rooms, can be transformed into coworking areas. It is important to be flexible in order to react to changes in the market. As a result, many hotels went out of business and experienced a huge drop in their customers.
The pandemic showed how hotels can be vulnerable to external factors. Focusing on local customs is one way to increase business resilience and continuity. It could be the locality or further afield, to neighboring cities and towns with staycations for couples or families. Between 2020 and 2021, bookings for staycations rose 18%.
According to PwC, a good experience can lead to a 14 percent price premium in the hotel sector. In the off-season, hotels can also increase occupancy rates by providing a great experience to local customers.
How to create a business plan for a hotel that is updated and resilient.
Analysis of the whole business to increase business agility and future-proof it against possible downside risks.
Reimagine your hotel space for different uses and optimize it for different buyer personas, like turning a hotel room that is underutilized into a coworking zone.
Missing the Marketing Boat
Marketing is increasingly driving business from the front. This is particularly true in the travel and tourist industry. Some hotels still view marketing as a nice-to-have rather than an essential part of their business.
The right CRM system, combined with a retargeting campaign, can help hotels generate more business. A second important rule is to advertise in the area where your target market is. If your ideal client is an over-50s audience, Facebook ads are the best way to promote. However, if you’re looking to attract younger clients with summer holidays, Instagram advertisements would be a better choice.
What makes your hotel different than your competitors, and what is your value proposition? Focus on this to increase business.
Get your marketing tech stack in order.
A best-of-breed CRM system is a must, as are automation tools that can take over manual tasks, help manage data, and provide a mobile-first, robust website with a great customer experience.
Create a wide funnel for marketing.
You can capture and retain more customers with a larger funnel. It is even better if you optimize it for hotel packages. Packages are more profitable and provide a more immersive experience.
With a blog, dedicated package pages, and paid campaigns on Google and social media platforms using relevant keywords, you can attract guests. You can position your hotel to maximize ROI if these keywords are relevant to the type of experience you provide, especially if you have a niche concept.
Market research is important and should be done often.
It is important to conduct market research periodically, such as every quarter. You will be able to identify any major shifts in the market’s behavior and demands, which in turn will inform your business strategy.
Increasing Operational Costs
The world is experiencing the highest inflation rates in decades, particularly in Europe, North America, and Latin America. Inflation is currently over 8% in the United States and Europe (at the time of writing, June 2022).
The cost of operating hotels is being driven up by inflation and rising energy prices. The cost of living is also a concern for employees, who are, in turn, putting pressure on hotels to raise salaries.
This pressing problem can be addressed by integrating automation technology into your hotel business wherever possible. These technologies, which are usually cloud-based, can automate time-consuming and laborious tasks. You could, for example, integrate a smart AI-based chatbot into your website and consider self-check-in and checkout processes as well as self-service buffets instead of table service.
You can also remove services that don’t add value to your guests’ experience. Outsourcing Revenue Management and Operations Management can be beneficial to your hotel.
