Top 8 Challenges Hotel Owners Face in 2019


Amidst these challenges, hoteliers need to step up their game. Whether you need to apply for hotel financing, implement new marketing decisions, or adopt the latest innovations, it’s your responsibility to make sure that your hotel is making money.

It’s important to be familiar with the common challenges hotel owners face so you can be prepared for anything. With that said, here are the top eight challenges for hotel businesses.

1. Seasonality of Demand

Seasonality is a common problem almost every hotelier has experienced. Peak seasons, like national holidays, Christmas, etc. means more customers and an increase in profit. But if hoteliers don’t anticipate the number of bookings, your staff and management will undergo unnecessary stress and longer working hours.

To ensure successful business operations, it’s crucial to keep up with the seasonality of demand. You might need to hire more personnel, change your rates, and open additional rooms. However, you also need to remember that demand will significantly drop during slower seasons. The additional employees and the resources you make use of during peak seasons may be more difficult to maintain during these times.

Effective management and diversification are necessary to manage the seasonality of demand in the hospitality industry.

2. Sustainability

Everyone is taking part in making the world a better and greener place to live in, including hotel owners. Businesses from various industries are taking proactive steps to reduce their carbon footprint. For the hotel industry, many hoteliers try to improve sustainability by using environment-friendly materials and redesigning their products and services.

Going green doesn’t have to be complicated. You can improve sustainability by encouraging your guests to reuse their towels and sheets. Another example would be banning the use of single-use plastic such as straws, plastic bottles, etc.

3. Increasing Competition

The number of hotels in the United States has increased over the years. Hotels must establish their competitive advantage to succeed amidst tough competition. Hotels have gained serious competition since the launch of Airbnb. Airbnb provides a convenient solution for guests looking for freedom, affordability, and a more culturally rich travel experience.

To compete with Airbnb, hotels need to highlight the services they offer that Airbnbs do not, such as consistent customer service, amenities (pool, Wi-Fi, gym, restaurants, room service, etc.), as well as trust and safety.

4. Change in Customer Demands

The goal of every business is to satisfy customer demand. However, customer demands and expectations change all the time. With that said, the ever-changing expectations and demands are a few of the biggest challenges hoteliers face.

It’s tough to meet every trend and demands. However, it’s important to cover the basics to ensure your customers will have a pleasant stay. Fast Wi-Fi, personalized service, fast check-ins and check-out process, entertainment, as well as other unique services are crucial to improve your customer satisfaction.

5. Cash Flow Issues

Healthy cash flow is essential in keeping your business operational. Cash flow problems usually occur when there is a delay in receiving payments from customers. Almost every business, small or large, experienced cash flow issues, including hotels. To avoid cash flow issues, it’s important to manage your finances effectively. You can delay the disbursement of cash while encouraging your clients to repay their loans faster.

Related: 5 Effective Ways to Cut Hotel Operating Costs

Another way to unlock working capital is to accept direct bookings from online channels where customers pay in advance. In this way, you’ll be able to access working capital to pay for daily business expenses like utility bills, payroll, inventory, maintenance, and more.

6. Keeping Up with Technological Advancements

Hoteliers are clamoring to keep up with the ever-changing technology. Because customers are now tech-savvy than ever before, a majority of hotels now have Wi-Fi and smart TVs. That’s why it’s imperative for hoteliers to explore different hotel financing to fund these advancements.

Hotel technology has evolved over the years. Currently, some hotels offer virtual reality and augmented reality tours on their website. Some hotels are also transitioning into ‘smart’ hotels, where guests can control their room – from lights, temperature, music, etc. – through a mobile device. Aside from meeting customer needs, hotels can also use technology to streamline workflow and improve productivity, enabling hoteliers to stay on top of business operations through their phones.

7. The Shift in Marketing Trends

On-going changes in marketing and advertising are also one of the challenges hoteliers face. The marketing strategies that were hit 10 years ago may not fare well today. Most of the marketing and advertising strategies are now geared online. Social media, websites, Google My Business, and SEO are not optional anymore. You need to adapt to these new marketing trends otherwise, you’ll get left out.

Fast Hotel Financing for Your Hotel

The tourism and hospitality industry is a growing sector. With B&Bs and hotels opening up everyday, you have to keep up with competition to avoid being left behind. Although challenges will always be present, it’s important to prepare yourself for it. When unexpected challenges arise, it’s important to have quick access to hotel financing. With extra funding, you can implement improvements and changes in your hotel and make sure that it will provide a top-notch service to guests.

Related: 8 Things You Need to Do Before Applying for Small Business Loans



Ezra Cabrera
Ezra Neiel Cabrera has a bachelor’s degree in Business Administration with a major in Entrepreneurial Marketing. Over the last 3 years, she has been writing business-centric articles to help small business owners grow and expand. Ezra mainly writes for SMB Compass, but you can find some of her work in All Business, Small Biz Daily, LaunchHouse, Marketing2Business, and Clutch, among others. When she’s not writing, you’ll find her in bed eating cookies and binge-watching Netflix.

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