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The 4 Biggest Challenges Facing Independent Hoteliers in 2017

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As an independent hotelier, you offer some things the big guys can’t: personality, and a personal touch.

That’s why, even though the big chains such as Hyatt and Marriott continue to swallow up market share around the world, it’s still good to be a boutique hotel manager.

After all, you and your fellow independent hoteliers have a lot of muscle in this industry, pulling in $7 billion in annual revenue and posting growth rates of 4.8% every year. More than 60,000 people are employed in independent hotels nationwide. Clearly, you’re doing something right.

But, as you well know, it’s still a lot of work to go it alone in the hotel business. And in 2017, the challenges are a lot different than they were 25 years ago … or even five years ago, for that matter.

Independent hoteliers

Based on our research, here are the four biggest challenges for independent hoteliers in 2017. And, to help you meet these challenges, we’ve compiled a few practical action steps for dealing with each.

1. Rising costs

The cost of commodities that you depend on are rising, and that presents a problem for a lot of hotels. After all, food and beverage revenue can be vital to a hotel, as they typically contribute between 10% and 20% of total revenues.

After dipping to a low in the 1990s and early 2000s, world food prices have been rising rapidly in the last decade. The pace has slowed down as of late, but that may only be temporary. Generally, food prices rise about 2.6% per year.

And then there’s the fact that customers are becoming increasingly finicky with their food. Hotel restaurants must now accommodate a wide range of food allergies, a rising demand for gluten-free food, and consumers looking for more organic options.

Action steps

  • Slim down your restaurant’s menu—fewer choices are less of a burden on your staff, and this will allow you to make more bulk food purchases
  • Buy ingredients from local vendors. It’s often cheaper than wholesale, and it will also impress your guests

2. Providing a personalized experience

The standard hotel experience is pretty straightforward: you walk up to the front desk, get your keys, unlock your door, and there’s a bed, a bathroom, a TV, maybe a desk. You go to sleep, wake up the next day, and forget the hotel existed.

But it doesn’t have to be that way. Thanks to the incredible amount of technology at our disposal today, there are a ton of opportunities to customize the experience for your guests, making your hotel an unforgettable place to stay. And that can have a huge impact on your bottom line, both by encouraging past guests to book again, and getting some good word-of-mouth advertising flowing for your hotel.

Hotels can now gather data through many different types of interactions, not just while the guest is on the property, but before they even walk through your doors.

By choosing hotel management software that includes guest experience management capabilities, you can also learn about individual guests’ preferences, enabling you to customize a stay that will cause your customers to remember you.

Action steps

  • Use your hotel’s website to gather information from customers through feedback forms and surveys
  • Get your IT person involved and learn about opportunities for collecting relevant data on your guests
  • Create a channel for customer engagement on social media such as Twitter or Facebook

3. Constant updates and modernization

With each year that passes, your amenities get older, and that can have a negative impact on your guests—and your reputation. If the technology in your hotel rooms is outdated, whether it be the TV or the Wi-Fi connection, it can significantly lower your customers’ satisfaction level.

These days, a guest wants to be able to flop down on the bed, turn on the TV, and start streaming Netflix and Hulu, just like they do at home.

Fortunately, if you do upgrade the technology in your hotel rooms, you’re doing better than three out of four hotels in the country, so it’s not hard to get ahead of the pack.

It can be expensive to upgrade, but there are options. For example, Samsung offers “Smart TVs,” which allow guests to use video streaming and apps, and you don’t have install coax wiring.

An example of a Smart TV, via Samsung

Action steps

  • Make sure you have Wi-Fi that actually works, as this has become a basic necessity for guests
  • Ask your guests how important televisions capable of video-streaming are, and consider upgrading

4. Managing increasingly complex business processes

The big chains have the advantage of scale, and that applies to jobs within the hotel as well. Unfortunately, independent hoteliers can’t rely on a big human resources department to handle all that stuff—they have to do it all in house.

It’s a challenge to juggle so many ins and outs in a small hotel. There’s front desk, housekeeping, HR, payroll, concierge, and possibly valet and a restaurant to manage, among other things.

Fortunately, there are a ton of great hotel management software options out there that put all of these functions under one umbrella and allow a hotel manager to keep an eye on the whole operation without getting frazzled. Comprehensive software may be the independent hotel manager’s best friend in the coming years.

Oracle’s Opera PMS, pictured here, is one of the leaders in hotel management

Action steps

  • Find a hotel management software option that consolidates as many tasks as possible into one platform. You can browse our directory, or take a look at the five most popular hotel management software options for small hotels.
  • Consolidate job descriptions whenever possible to simplify things—for example, provide training to your front desk person and then pay them overtime to work a few extra hours per month to deal with HR and payroll

What do you struggle with in the independent hotel industry?

We want to hear from you: what is your No. 1 concern in the future for your independent hotel? Is there something you wish you were doing better that you think would have a huge impact on your bottom line?

Please, let us know in the comments below.

Looking for Hospitality Property Management software? Check out Capterra's list of the best Hospitality Property Management software solutions.

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About the Author

Dan Taylor

Dan is a content writer at Capterra, specializing in hotel management, construction and real estate. Outside the office, he enjoys spending time with his family and friends, catching up with the latest offering from HBO or paying a visit to a new place.

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