The hospitality business is one of the toughest and most competitive ones you can be in. Still, it?s one that has a moderate barrier to entry. This is why it?s so easy for the inexperienced to assume that everybody can make it in this business, but that?s far from true.
It has been estimated that about 40% of hotels make it past the first year and that 80% fail before the 5-year mark. This is about 10% more than the average for all businesses. This is why you need to have a realistic idea of what it is to be a hotel owner and be ready to face the challenges. Here are some of the main challenges hotels have to face in their first years.
Damage to Property
Damage is a very important issue that you’ll have to consider when working in the hospitality industry. You might not be in the best area and attract the best type of client, so you may end up with more damage as a result. The sad part is that damage is not always done maliciously and therefore cannot always be claimed for.
This is often the case with things like air conditioning, for instance. It’s very common for people to misuse these units and put too much strain on them. This is why you will need to be prepared to do repairs and pay out of pocket for them.
It would be wise to start looking for good suppliers as well. Online is a great place to start if you want to find deals and there could always be a possibility of getting discounts if you’re a regular or buy in bulk. Suppliers like ptac4less.com are a great option. Having a good supplier on hand will make sure that you can get any important parts fast and not have to close out a room because it doesn’t have climatization.
The Rise of Airbnb
While the term ‘disruptive’ is often used loosely, Airbnb has been a disruptive force in the hospitality business in every sense of the word. As a hotel owner, you can’t afford to ignore it.
You also shouldn’t assume that price alone is the reason many people prefer to book an Airbnb nowadays. A lot of it has to do with the experience. Being able to enjoy a full apartment for roughly what you’d pay for a standard room at a high-end hotel is a no-brainer for many. Others will appreciate the extra amenities like a kitchen.
That means that you have to find ways to rival this experience. This may mean lowering the price on bigger rooms and offering things like complimentary meals, for instance. You also want to streamline the experience for your clients as much as possible.
Labor Issues
This is one of the most difficult issues to deal with in the hotel business. Hotel workers are not the most well paid, which means that finding and retaining talent is much more difficult. You have to be ready to constantly have new faces running the floor and having to form them. You also have to find ways to offer competitive pay and benefits without eating too much into your margin.
Operating a hotel is not easy, and unless you’re ready for what you’re about to face, you’re setting yourself for failure. So, make sure that you take the time to learn as much as you can about the business and consider speaking with an expert first so they can prepare you for some of these obstacles.
