There are many ways to make improvements to a hotel’s operating performance, but most assume that things are going well to start with, and that a little innovation or creativity can drive the business to new heights. Sometimes, however, things are not going so well, or are just about to take a turn for the worse. If you can recognize the warning signs and catch the problem in its early stages, you may still be able to turn the business around, but complacency in the face of any of these five clear signs of trouble will only exacerbate the situation.
Most potential customers today will rely on reviews to guide their booking decisions. Most websites list the most recent reviews first, so how good you were a couple of years ago ceases to matter. The key is how good you are right now, and if the reviews show a downward trend, with negative comments and low scores, this will soon start to have an impact on bookings. The good news is that the feedback will often tell you where you’re going wrong, so this particular warning problem can also be a part of the solution – as long as you monitor your reviews closely and respond readily if things start to head south.
2.Wrong distribution channels
Maximizing revenues depends on optimizing the use of various distribution channels. If instead you’re getting too much business through the least profitable channels, your occupancy rates may look good but the underlying profitability won’t be quite so strong. If you have too many customers booking through the wrong channels, your revenue manager will need to take note and implement steps to adjust the balance. If you can’t sell enough rooms directly and instead have to rely on a third party, the long term future starts to look bleak.
3.Increasing staff turnover
The hotel industry typically experiences higher employee turnover rates than other sectors, so when we talk about increasing turnover, the comparison is made with a high baseline in mind. However, if you really can’t keep hold of staff, it’s often a sign that something is wrong with the working environment or the management practices, and this leads to two problems as a consequence. The first is that new and inexperienced staff won’t be able to maintain service standards, and this will have a negative impact upon the guest experience, setting in motion a deadly spiral of reduced bookings and poor reviews. The second is that poor human resources management may not be the only kind of poor management going on, and other parts of the hotel’s operation may also be found lacking in professional guidance. This does not bode well.
4.Changing local environment
Much of a hotel’s success may depend upon the location – and the situation on the ground can change. In dramatic cases, the principal raison d’être for a particular property can be eliminated, leaving the hotel with very limited prospects. Hotels built to serve now defunct airports, stations, or stadiums may ultimately have to close their doors. Alternatively, some hotels can become victims of a neighbourhood’s success. When whole city blocks undergo renovation and redevelopment, demand for rooms may certainly rise, but this can also attract competition from new hotels which can quickly seize control of the market, leaving an older property to fall by the wayside. It is therefore essential to keep a close eye on the local surroundings to be ready to address any threats which may surface.
It may seem that all guests would be considered good, with the exception of the troublesome and unruly ones who have to be escorted off the premises – but this might not be the case. Just as it is essential to use the right distribution channels, it is also important to attract the right guests. In this case, it’s not so much the guests you attract that will be wrong, but the guests you can’t attract. If you’re an upscale hotel in a small mining town, for example, you may struggle. You’re probably designed for guests who simply aren’t there, and if you don’t want your rooms to stand empty, you’ll have to lower your rates and invite the budget crowd. If your hotel is part of a much larger group, a rebranding can solve the problem, but if you’re an independent you’ll probably have to take a careful look at whether your overall concept needs to change.