Problems Faced By The Hotel Industry


The hotel industry faces challenges due to the industry's ever-changing nature. The hospitality industry must identify these challenges and tackle them with robust solutions. An up-to-date hotel business always attracts more guests and surpasses the competition.
  1. What are the problems faced by the hotel industry?
  2. How can hotels tackle these problems?

Long gone are the days when guests would only expect complimentary shampoos and soaps from a hotel!

Customer demands and market trends are dramatically shifting. Keeping up with these trends and acquiring consistent occupancy are a few challenges hotels face.

Hotels face numerous issues while attempting to focus on guest satisfaction. 

While some problems are inevitable and cannot be entirely avoided, they can be minimized by understanding market demand and trends!

This article will look at the hotel industry's top 6 problems and their solutions.

Top 6 Problems Faced by The Hotel Industry

1. Massive Commissions Charged by OTA Platforms

OTA problems faced by hospitality industry

Travelers nowadays prefer Online Travel Agents (OTAs) to book their stay and other related activities, as OTA platforms take care of every travel aspect.

Being present on OTA platforms helps hotels fill their rooms faster. But, again, this is because they handle marketing, bringing in more reservations, exposure, etc.

These platforms, however, charge a massive commission. It can range from 3% to 30% or higher. In addition, some platforms also charge commissions on additional activities such as breakfast, spa bookings, extra beds, and so on.

Paying these exorbitant commissions on every reservation is one of the most challenging problems hotels face.

Solution for Commissions Charged by OTA Platforms

a. Better Digital Marketing Services for Hotels

Because OTA platforms undoubtedly help hotels generate business, you should invest in them. But, as a hotel owner, you should also prioritize SEO and advertising your website.

For advertising purposes, use social media platforms and email marketing. You should invest more in digital marketing services to increase website traffic and direct bookings.

Learn How Hotels Can Improve Their Ranking in Search Engines with Simple On-Page Optimization

b. Analyze OTA Performance

If you have your hotel listed on multiple OTAs, this is the time you analyze their performance. Check which OTA brings you the most business and invest more there.

Likewise, you can withdraw from the OTA that doesn't perform well. You can also compare commission rates and their performance.

c. Property Management Systems for Hotels

Property management for hotels

Invest in a Property Management System that will let you manage your OTAs on one platform. Seamlessly manage inventories, pricing, and much more on a single platform.

The Smart PMS™ by INNsight is an all-in-one hotel Property Management System (PMS) with its own CRS and practical tools for managing prices and inventories.

This blog is about what a Property Management System for Hotels is

2. Lack of Guest Information from OTAs

When a reservation is made through OTA, the hotel cannot access guest information until they arrive at the property.

A seamless guest experience starts before they arrive at the hotel. Guest information before arrival is essential for hotels to make necessary arrangements. 

In addition, hotels cannot do pre-stay surveys due to OTA reservations.

The Solution to the Lack of Guest Information from OTAs

Although OTAs don't let hotels access guest information beforehand, you can obtain it post-arrival.

Prioritizing the guest experience will help you gain loyal customers. Think outside of the box and offer personalized service to your guests.

If your departments are working in collaboration, the quality of service improves. You can use Facilities Management Software - FMS for better coordination between your staff to enhance service quality.

Word of mouth is still the best way to advertise your services. Motivate your guests to come back through offers, vouchers, promotions, etc. Here, you can boost direct bookings through your website!

Offering a simple complimentary drink or a dessert upon booking through the website will help encourage guests; hence, direct bookings!

3. Poor Reputation Management

Poor reputation feedback

Hotels get their bookings through various OTA platforms and receive reviews on these platforms.

Hotels often do not respond to these reviews, which might affect their online reputation. However, when guests receive responses from the hotel, they feel valued! 

Even if a guest had a poor experience, a hotel response might help with damage control. But, due to the wide variety of platforms, it is difficult for hotels to manage and respond to all these reviews.

In the case of a bad review, there is a possibility of misunderstanding between the hotel and guests. If such reviews remain unattended, it will tarnish the hotel's reputation in the eyes of prospective customers.

The Solution to Poor Reputation Management

Reviews play a crucial role when customers decide where to stay. Encourage your guests to leave a review with the help of QR code scanning technology

This can help you maintain control over reviews and increase positive reviews on OTAs or standalone websites.

In addition, respond to all reviews as soon as possible. 

RMS by INNsight helps you improve your guest relations by replying to all guest reviews within 48 hours. You can also track your reputation score online across various channels to see how you are trending and how your positioning compares to competitors.

4. Low Room Turnover Due to Off-Season

Seasons significantly impact tourism. Nobody goes to the beach during monsoon season or to the desert during the peak of summer! This is when the hotel industry suffers.

Bookings are challenging during the off-season. Hotels risk a decrease in revenue as a consequence.

Seasons cannot be avoided, and reducing room rates alone will not lead to more bookings.

The Solution to Low Room Turnover Due to Off-Season

You may combat this challenge by planning events or activities in the hotel's banquet halls, lobby, etc.

For example, hotels in the desert area can host indoor activities.

Offering memberships or loyalty programs are other options. Design these programs in a way that will encourage sales in the off-season.

Though this may only partially solve the problem, it will help generate revenue to a certain extent!

5. Lack of Trained and Skilled Staff

Lack of trained and skilled staff

The hotel industry is all about hospitality! Regardless of the facilities you offer, a guest who felt unwelcome on your premises is unlikely to stay again.

Employees who lack training or skills deliver services of poorer quality and are less productive. Low-quality service includes minor issues with check-in or check-out, dirty premises, and poor customer service.

Hotels often need help finding professional personnel due to geographical limitations, minimum wage expectations, high employee turnover, etc.

With the available staff, it is sometimes difficult for hotels to maintain service quality, leading to unhappy guests.

The Solution to the Lack of Trained and Skilled Staff

  • While hiring employees, thoroughly screen candidates.
  • Build standard operating procedures for each vertical and motivate your staff to follow them.
  • Invest in engaging staff training.
  • To lower employee migration, offer better treatment and work-life balance - two significant reasons for rapid employee turnover.

6. Poor Collaboration Between Departments

Unsurprisingly, solid inter-departmental communication is key to any hotel's success. But unfortunately, many hotels suffer due to a lack of collaboration.

All departments in the hotel are interconnected, and sharing information is of utmost importance. If anything goes wrong in the process, it only leads to conflict.

When the workflow is streamlined and the necessary information is shared between departments properly, it leads to satisfactory guest service.

Using different software for different departments worsens this issue. Hence, departments working without collaboration is one of the most prominent challenges hotels face.

The Solution to Poor Collaboration Between Departments

Invest in a Facilities Management System that can help you track work orders, housekeeping, front office tasks, complaints, etc.

For example, INNsight's easy-to-use FMS helps you with many functions, such as

  • Setting up your daily housekeeping list
  • Housekeeping requests
  • Lost and found notifications
  • Guest complaints

It is an automated system that sends notifications to the concerned departments and ensures that every department is on the same page.

This ensures the team can work together to deliver the best experience for guests. 

In a Nutshell,

The problems faced by the hotel industry are challenging to overcome. However, precautions can be taken, and they can be minimized. It's not an overnight process. You have to work consistently to achieve results. 

FAQs Related to Problems Faced by the Hotel Industry

Q. How to tackle OTA commissions to maximize revenue?

A. Analyze OTA performance and figure out which platform works best for you. If using multiple OTAs, invest in an efficient Property Management System where you can manage all OTAs on a single platform. Instead of entirely relying on OTAs, work on your standalone website and digital marketing. Increase direct bookings by increasing traffic on your website.

Q. How to increase reservations in the off-season?

A. Utilize unused areas of your hotel, such as the lobby, and organize events or workshop activities to generate revenue. Offer loyalty programs or memberships that will increase room occupancy in the off-season. Running marketing campaigns in the off-season, offering promotions and discounts, and collaborating with local businesses will help hotels to beat off-season issues.

Q. How to improve interdepartmental coordination in hotels?

A. Hotels need to invest in an efficient Facilities Management System to track and manage all departments' work orders. The staff can easily update the room status or pass on a message to the concerned departments. With better interdepartmental communication, you can deliver the best as a team!

Q. How to improve the hotel's reputation management?

A. The hotel may use QR code scanning technology to gain complete control over guest reviews. Invest in a Reputation Management System that will help you manage all guest reviews from multiple OTAs and your standalone website. With these, you can monitor reviews in real time and ensure responses that make an impact.


By submitting your email address, you confirm that you would like to receive marketing emails from INNsight. In addition, you agree to the storing and processing your data by INNsight as described in our privacy policy.