Challenges Faced by Hotel Industry After 2017

This assignment discusses the challenges faced by the hotel industry post-2017. It highlights four major issues: continuous changing of consumer demands, competition from hotel sector alternatives like Airbnb, ineffective and improper marketing, and complexity with the management of energy. The document also touches upon poor satisfaction of customers as a result of ever-changing demands and high competition.

CONTEMPORARY HOSPITALITY ISSUES
INTRODUCTION
The hotel industry is one of the fastest growing sector of the worlds and as integral as well as an indispensable
part f the hospitality industry. The hotel industry has shown little signs of slowing down over years even during the economic
recession. There are many contemporary issues in hospitality sector such as continuously changing consumer demands, high
competition, improper and ineffective marketing and many such issues. This present report is context to the Hilton Hotel. It is
one of the global brand of all types of hotel services and resorts. The aim of this report is to identify the contemporary issues
as well as current trends in hospitality management.
2. Five Hospitality Issues.
It is true that hotel sector is one of the fastest growing industry across the world and it is indispensable and
integral part of hospitality sector. Hospitality sector is facing many issues which is very big concern for the hospitality sector.
During the time of recession, hospitality industry has been little signs of declining over the years. But, there are some five
contemporary issues related to the above discuss trends that hotel operators face which they have to overcome as soon as
possible in order to take corrective actions. Here are the description of contemporary issues are as follows- (people,
customers, external business environment and internal business practices)
Continuous Changing of Consumer Demands (People and Customers): This is one of the biggest issue that
is faced by the hospitality industry, It is not surprising that customers are now become highly advance because technologies
have made people impatient and people wants things in jiffy. After 2017, it has become one of the most challenging task for
hoteliers to understand the customers. The reason is that the customers in hospitality industry has become more culturally
oriented as well as they spend either $100 or $1000 or more but they are expecting value for what they are paying. In order to
combat the effect this issues hotel operators are tracking the needs and expectations of customers through software so that
they could understand the customer in better way. For example: In New York, customer check is, they ask for Budweiser beer
and extra pillow and there are many other famous hotels in UK who are using Customer tracking software to understand the
customers in more precise manner.
Competition from Hotel Sector alternatives like Airbnb (External Business Environment): It is fact that
hotel industry is core sector in the development and growth of the economy. Hotel operators are performing very nicely from
last years but after 2017 there are facing serious challenges which are threatening there competition from Airbnb. As per the
report of Hospitalitynet, Airbnb valuation is over $10 Bn that is higher than a big hotel chain across the world like Hyatt.
Airbnb provides similar services which other hotels are providing at very reasonable rates which is impact the business
practices of hospitality industry.
Ineffective and Improper marketing (internal business practices): It is true that marketing plays a core role
in the development and growth of hotel because customer awareness is very essential. Hospitality industry is still adverse and
legging behind in technology. Hotel industry is outpaced by other sectors in adaptation of technology. According to the latest
trends in hospitality industry, in order to achieve competitive advantages in the market technology adaptation is very
important. With the growing pace of technology, hotel are forces to conduct online marketing and stop traditional marketing
strategies.
Complexity with the management of Energy (External Business Environment): This is also one of the
major issue that is faced by hotel operators as they have to be very aware of the concern of environmental protection. They are
forces to alter their operation's to be green and smoke free. Greenery at hotel campus also raise the positive feeling of
customers towards the hotel and if they ignore the environment sustainability it seriously leads to adverse impact on the
overall operation's of hotel.
1. Overview of Contemporary hospitality trends.
Hospitality industry is developing and growing with the high pace in the economy. There are some current
hospitality trends which all hotel organisations needs to follow or incorporate in order to remain competitive in the market.
Current trends in hospitality industry are developing with the aims that hoteliers are not only selling rooms, they sell a story
(experience, unique, character). Here are some hospitality and technology trends which are as describe below-
Internet Of Things & Big Data is coming into the rooms: By 2017, it has becomes basic needs for all hotels
in hospitality sector as well as for Hilton too. High Definition televisions, Wi-Fi, internet etc. are the basic requirement of
customers. But, as the time is passing and evolution of technology is growing at very fast, the demand of customers as well as
smart hoteliers are rising relying in technology. Advance technologies helps to gather the data as well as allows the delivery of
highly personalised services. In 2018, the Internet Of Things (IOT) is developed and now customers are demanding this
advance application in the hotel. IOT is also very useful foo hoteliers as they can get the completed information about the
customer journey so that they can anticipate the needs and expectations of customers.
Home Sharing Continues to reshape whole industry: This is also one of the current trend in hospitality
industry as there are some institutions who allows sharing rooms or apartments to hotel. For example, the hospitality sector is
reshaped by Airbnb as they progress upon the space of properties, hotel chains such as Hyatta, Wyndham and Accor hotel and
resorts are beginning to invest in home sharing organisations. This trend is growing with high pace because hotel and home
sharing companies like Airbnb work as a team and they offer wide options and better services to guest.
The period of the Bots: This is another current trends in hospitality industry as hospitality companies are
focussing on this to engage with their customers for better satisfaction level. Chatbots represent a way for hoteliers in order to
interact with people easily in conversational manner that don't include real people. Rather, the purpose of incorporating bots is
to respond only to commonly asked question from audience as well as to interact with people.
Rising Focus on Direct Booking: Hotel operators are now focusing on direct bookings for raising the
profitability of the business. Hotel operators are making there websites more presentable to the audience so that they book
hotel rooms and resorts directly by checking the info of hotel from website. Further they are not only focussing on website but
they are building loyalty and brand recall on other owned platforms like on Trip Advisor, Yelp, Facebook etc.
Regular Shift in Focus to Mobile: This is also one of the current trend in hospitality industry which is not
completely new but something values and worth remarking as it will go along well into and possibly beyond 2018. It is sure,
that this trend will come into centring point in coming time as well as mobile platform will play important role in raising the
3. Key Characteristics of each issues and there positive and negative impact of business practices.
Key Characteristic of issues are as follows:
 It is external pressure.
 Difficult to anticipate the demand of customers.
 Continuous monitoring is required.
 Giving cut-through competition.
 Cutting the rate of the hotel services a great extent.
 Airbnb do not offer luxury services.
 Marketing is the key to achieve success in the market.
 Raise awareness among customers about the services.
 Building brand in the market.
 Necessary task for all hotel operators to manage environmental concerns.
 Gain the trust of customers and society.
 Raise the satisfaction level of all stakeholders.
 It provided relax and happy environment across the hotel.
Continuous Changing of Consumer Demands Issue
POSITIVE NEGATIVE
 Regular changing of customer demand bring
innovation which is profitable for the hotel.
 Raise the skills and experience of staff
members to deal with the ever changing
consumer demands.
 It raises the cost of production which
in turn decreases the profitability of
the hotel.
 It also increases the amount of
wastage of resources.
Competition from Hotel Sector Issue alternatives like Airbnb
POSITIVE NEGATIVE
 Hotel operators can contract
with Airbnb.
 Airbnb only provides basic
services for accommodation
which is very a positive effect
of other hotels in hospitality
industry.
 Airbnb has syphoned the demand from hotels and
limited services properties in key market as well as
high tourist area.
 The revenue or entire profitability is affected by
Airbnb.
Ineffective and Improper marketing Issue
POSITIVE NEGATIVE
 Help to achieve competitive
edge.
 Cost effective marketing.
 Increase the customer
satisfaction level.
 Needs skilled and highly technical staff members.
 Risk of security and privacy of data.
Complexity with the management of Energy Issue
POSITIVE NEGATIVE
 It increases the revenue of
the hotel as more investors
invest with the organisation.
 Raise the brand name or
goodwill of the hotel.
 It provides eco-friendly
environment.
 Raise the attention of
travellers towards the
greenery of hotel.
 Ignorance leads to adverse impact on entire
profitability of the hotel organisation.
 It could affect the goodwill of the company.
 Raise the cost of operations.
4. Speculation of how trends is likely to continue to develop.
Hospitality is one of the fastest growing industry as compare to other industry. It is very important for hotel operators to consider
and focus on the current trends because it is directly connected with the profitability of the organisation. Today, The hotel industry has developed
from small Inn to multi- million dollar businesses. It is fact that the these trends such as IOT, home sharing, the Bots, direct booking, use of smart
phones will continuously increase because of advancement of technologies and high customer awareness. For example: In 2018, the Internet Of
Things (IOT) is developed and now customers are demanding this advance application in the hotel, as these shows that the trends will be
continuously developing.
In addition to this, the trends of investing with the home sharing companies are also increasing because it is cost effective merger,
as famous hotels like Hyatta, Wyndham and Accor hotel because hospitality sector is reshaped by Airbnb as they progress upon the space of
properties. Airbnb is giving cut-throat competition to other hotels but still agreement with home sharing companies is profitable. Furthermore,
direct booking is also one of the emerging trends that will continue to develop in coming time, it is because of advance technology as customers
now check all the information on company's website and book the rooms and resorts through internet.
So, it is also very important for hotel industry to develop the platform on online base because it is current and ongoing trend in
hospitality industry. In addition to this, customer satisfaction is very important for the company as it hoteliers are using software like Chatbots
that response to customers common questions as well as interact with them in a precise manner. So, it has been clearly understood that these
trends will continuously develop and it has possible ongoing effect on hospitality industry because of high pace of technologies among customers
and competitors.
CONCLUSION
From the above report, it has been concluded that hotel industry is one of the fastest growing sector of the worlds and as integral as well
as an indispensable part of the hospitality industry. The report also discussed the current trends like IOT as it has developed and now customers are
demanding this advance application in the hotel. Moreover, the report also included the rising trends of home sharing companies as it this trend is
growing with high pace because hotel and home sharing companies and they are working as a team. The assignment also concluded that some five
contemporary issues related to the current trends that hotel operators face which they have to overcome as fast as possible in order to take corrective
actions. Ever changing demand of customers is one of the biggest challenge that hospitality industry is facing. Direct marketing is summarised as cost
effective strategies for hotels because of high dependency of customers on technologies.
REFERENCES
Books and Journals
Van Niekerk, M., 2017. Contemporary issues in events, festivals and destination management. International Journal of Contemporary Hospitality
Management, 29(3), pp.842-847.
Sheehan, M., Grant, K. and Garavan, T., 2018. Strategic talent management: A macro and micro analysis of current issues in hospitality and
tourism. Worldwide Hospitality and Tourism Themes, 10(1), pp.28-41.
Aragon-Correa, J.A., Martin-Tapia, I. and de la Torre-Ruiz, J., 2015. Sustainability issues and hospitality and tourism firms’ strategies: Analytical
review and future directions. International Journal of Contemporary Hospitality Management, 27(3), pp.498-522.
Martínez, P. and Nishiyama, N., 2017. Enhancing customer-based brand equity through CSR in the hospitality sector. International Journal of
Hospitality & Tourism Administration, pp.1-25.
Jovicic, D.Z., 2016. Key issues in the conceptualization of tourism destinations. Tourism Geographies, 18(4), pp.445-457.
Poor Satisfaction of Customers Issue
POSITIVE NEGATIVE
 Poor customer satisfaction
leads does not lead to any
positive impact on the hotel.
 Poor Customer satisfactions leads to loss of
business.
 No chances of connecting ad integrating with
potential customers.
 Staff members also leave.
 The revenue of and profit of the hotel is also
shrunk.
 The goodwill and reputation of the company is
affected.