We sat down with Matthews™ Hospitality Associate, Ryan Sanchez, to discuss the prevailing challenges throughout the hospitality industry. Read on to learn why the hospitality industry remains a vital component of the economy despite economic volatility.
What are Some Problems the Hospitality Industry Faces Currently?
- Labor Costs: Labor costs can be a significant challenge for the hospitality sector, as these types of properties heavily rely on employees to provide guest services. High labor costs can impact the profitability of a business and make it difficult for hotels to remain competitive.
- Seasonality: Many hotels & resorts experience industry experience fluctuations in demand throughout the year. This can make it challenging to manage staffing levels and maintain profitability during slower periods.
- Competition: Competition is a significant challenge for businesses in the hospitality industry. Companies must continually evolve their offerings and improve their services to stay ahead of the competition and attract customers.
- Technology: The use of technology is rapidly changing the industry, and hotels must be able to keep up with these changes to remain competitive. This may involve investing in new technologies, such as online booking systems or mobile apps, or upgrading existing systems to improve the guest experience.
- Regulations: The hospitality industry is subject to regulations that can impact operations, such as health and safety, environmental, and labor laws. Keeping up with changing regulations can be a challenge for companies, particularly those operating in multiple jurisdictions.
- Sustainability: Sustainability is becoming an increasingly important issue for businesses, especially hospitality that uses a large quantity of resources. Hoteliers must find ways to operate in an environmentally responsible manner while meeting their guests’ needs and maintaining profitability and health standards.
Despite these challenges, the hospitality industry remains a vital part of the economy and continues to grow and evolve. Companies that can effectively manage these challenges and adapt to changing conditions will likely succeed in the long term.
How Can We Solve These Challenges?
- Labor Costs: To manage labor costs, companies can implement cost-saving measures such as streamlining processes, automating tasks, or using technology to improve efficiency. They can also offer flexible work arrangements, such as part-time or remote work, to reduce labor costs while still meeting the needs of their employees and guests.
- Seasonality: To address fluctuations in demand, companies can offer special promotions and packages during slower periods to attract visitors or local residents for “staycations”. They can also focus on building relationships with repeat customers and developing new marketing strategies to reach new audiences.
- Competition: To stay ahead of the competition, hoteliers can focus on providing a high-quality guest experience, offering unique and innovative products and services, and adding amenities or additional guest services. They can also engage in research and development to identify new opportunities and stay ahead of industry trends.
- Technology: Owners in the hospitality industry can invest in new technologies and systems to automate tasks and streamline operations, such as touchless check-in, or service automation through AI. They can also offer online booking systems and mobile apps to make it easier for guests to access information and make reservations.
- Regulations: To comply with regulations, hospitality properties should stay informed about changes in the law and invest in training and education for employees to ensure their knowledge is up to date. They can also work with industry organizations and advocacy groups to support their operations.
- Sustainability: To address sustainability, businesses can adopt environmentally-friendly practices such as encouraging guests to forgo daily room cleaning to help reduce water and energy usage. In addition, management should find ways to reduce waste, use renewable energy sources when possible, and place environmentally-friendly products in rooms. They can also educate guests about their sustainability efforts and encourage them to participate.