Top Challenges in Hospitality Industry & How to Overcome them

The hospitality industry is witnessing rapidly evolving trends in diverse areas ranging from booking management and personalized service to technological integration at various stages. In this context, it is important to note that there are multiple challenges in hospitality industry that you might face as you go along. However, if you’re resilient and resourceful, you can actually convert these challenges into new opportunities that help you grow your business and win the trust and loyalty of customers. It’s also apt to say that a hospitality business has multiple cogs in the wheel; any one of them breaking down means compromising on the entire operations and a loss of goodwill/business. Hence, noting a few challenges and their solutions is important for any industry professional/business owner. Let’s look at them below for your benefit. 

Common Hospitality Challenges

Here are some of the common problems in hospitality industry and their solutions (note these are only a few and not indicative of the entire spectrum of possible issues). 

• Shortage of Labor

It is probably one of the biggest issues in hospitality industry that everyone dreads. Shortage of skilled labor hits hotels and other hospitality businesses hard, since labor is the main success component in a people-driven industry. Without proper staff to run the show, the guest experience may suffer, while all aspects of hotel operations may also be compromised. 

 Solution- The basic one lies in recruiting more manpower and paying them well. The long-term solution lies in automating various repetitive and regular tasks with technology and software tools. This will lower manpower dependence in various areas. 

• Higher Operational Costs

Another one of the biggest challenges in the hotel industry is how to deal with inflation. It makes everything costlier and operational expenditure may go up in the long run. That’s where running a hotel becomes economically challenging or even unviable from a management standpoint. 

Solution- One of the biggest solutions is to adopt a sustainable outlook with emphasis on zero wastage and efficient usage of resources. Investing in environment-friendly and cost-saving utilities may help, along with utilizing technology to track and monitor supplies (prevents over-ordering or undersupply) and lower wastage wherever possible. Efficient usage of available space, optimizing bookings, cross-training staff members, and automating tasks may help save costs as well.  

• Meeting Higher Demand

Yes, higher demand is always welcome as far as hospitality is concerned (considering the seasonal nature of the business), but it sometimes is challenging. Hotels get a steady rush of demand, but do not know how to manage it or cater to everyone. It may lead to missed opportunities in terms of revenues, while also making them seem unavailable to potential customers. Brand reputation may also take a hit at times.  

Solution- Using guest management systems for building databases along with investing in an automated and efficient booking management platform. This ensures no over-bookings and real-time updates. Simultaneously, investing in tech-driven instant communication with potential guests may also simplify this problem. Also, optimizing check-ins and check-outs may help cater to more guests.  

• Changes in Marketing Trends

It is one of the key trends and issues in hospitality industry today. Hotels cannot keep up with digital marketing and social media platforms, while syncing properly with aggregators and other platforms that can drive bookings. This leads to loss of potential revenues and lack of awareness among potential consumers regarding the property/brand.  

Solution- Investing in suitable digital marketing solutions is the way forward, along with an efficient hotel management system that syncs with OTAs and other booking platforms. Optimizing OTA and other listings along with the hotel website and investing in social media marketing/posts is also the way forward. Other focus areas include guest reviews, quick communication, and of course, personalized (tech-driven) outreach to guests. You can also use intelligent tech tools to come up with promotions and offers that draw more customers and help you optimize hotel inventory better.  

• Housekeeping Problems

Housekeeping issues can seriously derail your hotel’s operations and leave a bad taste in the mouth for guests. Cleanliness, attention to detail, and promptness are keys to success in this space. 

 Solution- You have to manage housekeeping with proper strategies and a housekeeping management system. The team should be continually in the loop about check-ins and check-outs through efficient hotel management systems. They can clean dirty rooms instantly and maintain common areas consistently, with full tracking and real-time updates. Everyone can prepare in advance for guest arrivals and departures, thereby avoiding any challenges in cleanliness and housekeeping operations. 

• Changing Expectations of Guests

Many hospitality brands find it hard to keep up with changing expectations and preferences of guests, right from high-speed Wi-Fi and entertainment to unique experiences, quick check-ins/check-outs, and so on. Many people also want contactless hotel services these days.  

Solution- You can leverage technology to offer contactless guest services through a self-service portal/app. This will enable super-fast check-ins/check-outs, enable property location sharing, pick-up and drop-off, meal bookings, and other services. You can also invest in high-speed internet, personalized experiences, and tie-up with local providers and tourist attractions for ensuring unique experiences for guests.  

• Losing Customers

This is probably one of the biggest challenges in hospitality industry that you should be aware of. Many hotels lose customers to attractive offers provided by their rivals or even due to a lack of engagement/connections with their customer base.  

Solution- Use technology to automate follow-up marketing, notifications/updates, and personalized guest communication. Make customized recommendations based on guest preferences and come up with tailored offers. Create a strategic loyalty program with discounts/extra amenities and reward points. Build a loyal guest community that helps you not only with word of mouth marketing, but also gives you repeat business. 

Emerging Trends and Opportunities in the Hospitality Industry 

Several challenges in hospitality industry can actually be turned into opportunities if you’re quick to spot trends and adapt to them. Let’s take a look at some of these trends and opportunities in the sector today. 

• Personalization

Did you know you can personalize recommendations and guest offers with data analytics and insights? That’s the beauty of AI and related tech. What this does is help you retain your customers, while also benefiting from their word-of-mouth marketing. 

• Chatbots

Many hotels are finding it more convenient, fast, and cost-effective to use Chatbots and so will you! They can direct customers to all the help and info they need, while also taking care of bookings in real-time. What can be better? 

• Wellness & Sustainability

These are two sides to the coin actually! Guests now prefer hotels that have energy-efficient fixtures, wellness features like spas, gyms, yoga, better air quality, etc. and of course, a focus on sustainability in every aspect of their operations. So you can probably start looking at these things more seriously now. 

• Contactless Payments & Check-In/Check-Out

Technology is enabling guest apps and platforms for swift check-ins and check-outs along with contactless payments. This helps guests save time and contributes to a better experience. 

• Automation

It is helping hospitality brands save costs and reduce dependence on labor. Automation is revolutionizing everything from check-in and check-out processes to billing, temperature control, and even marketing and distribution activities. 

• Business + Leisure Combo

Many people are looking for remote work options with a mix of leisure and vacations. Hotels are now catering to these travelers with work desks, conferencing, Wi-Fi, and flexibility in terms of leases.  

• Voice Control

Guests are now increasingly looking at smart devices in their rooms to use voice commands/controls. This helps them control their room devices, get answers to questions, and also make service requests. 

• Experiential Travel

More people now want local experiences and activities as a part of their hotel stay. As a result, several brands and properties are tying up with local players to offer these experiences to guests. 

Conclusion

All the challenges in hotel industry have their dedicated solutions. All the challenges in hotel industry have their dedicated solutions. So, focus on what’s important and take the leap towards futuristic evolution. Here’s to building a successful hospitality business!