The hotel industry faces many challenges today. Here is an overview of 5 of the main ones.

1. 5 Challenges faced by the hotel industry today (and how it affects you)
The last decade has been a very challenging time for the hotel industry with many diverse
challenges being thrown its way. Below is a list of five of the most difficult ones faced by them
currently together with a brief explanation of how it affects you the customer.
1. Global Financial Crisis
The GFC has hit the hotel industry hard. In a time when most households have had to tighten
their financial belts, luxuries like holidays have been forced on to the backburner for the
foreseeable future at least. As a result many operators, particularly those that had recently
opened and/or were family run have folded, unable to maintain sustainable businesses. Many
companies have lost a lot of money, or at the very least taken on huge debt. Yet some are
fighting back in the best way they know how - by offering their rooms in the form of deals at
ridiculously low prices. In recent years, during off peak periods, some well-established five star
hotels have gone so far as slashing their rates by up to 80% off their normally advertised price.
As a consequence on any given day a simple web search should reveal many great bargains.
Good news for those of you who can still afford to pay for a getaway.
2. Competition
Prior to the GFC the hotel industry had been booming. So much so that more hotels were
opening every week across the world than at any time in the previous 50 years. With so many
providers competing in a declining market the competition to attract hotel bookings has become
fierce. Again this has contributed to the staggering number of deals that are available at any
given day on any given hotel booking site. Taking many different forms including buy two nights
get one free, free room upgrades and free breakfast these offers only serve to heighten the
guests experience.
3. Product Offerings
Another thing competition has brought is advancement in the range of services, facilities and
amenities hotels offer. There was a time not so long again when all hotels offered was a bed,
wardrobe and bedside table. Nowadays however most hotels, even those that operate at a two
or three star level, offer things like flat screen television, DVD player, complimentary Wi-Fi and a
gym as standard. At the higher end of the rating scale this has been taken much further, to the
point where the hotel themselves have actually become a destination on account of all the

2. services, facilities and amenities it offers. Michelin star rated restaurants, world class spas,
designer golf courses, famous nightclubs or entertainment centres and art galleries are just
some of the things now being offered as standard. In the next few years you can expect the
envelope to be pushed further.
4. Customer Expectations
As more hotels offer an increasingly wider portfolio of services, facilities and amenities as
standard so it follows that customer expectations of them will increase. When looking to book a
hotel customers will naturally become more discriminative against those operators who do not
meet these expectations. If a hotel doesn’t offer, for instance, free Wi-Fi or a swimming pool,
then most people will book a room somewhere else that does.
5. Social Media
Social Media platforms like Facebook, Twitter and Google + is arguably the biggest challenge
facing the hotel industry today. Never before has the consumer had such a powerful influence to
make or break a hotel’s reputation. Should a guest feel that a hotel has offered ‘good’ or worse,
‘bad’ service then this can instantly relayed to thousands of online friends, followers or
browsers. As a result a hotel can very quickly gain a good or bad name. Many have attributed
subsequent spikes or declines in booking as a result of feedback and recommendations tweeted
or posted on online forums. It is common sense to realise that most people wanting to make a
hotel reservation will take particular notice of the experiences – good or bad – conveyed by
guests who have previously paid to stay there. So as a hotel operator you really need to manage
and monitor your social media presence.