Hospitality is a multi-billion dollar business in which finances weigh heavily. The ultimate goal has always been to increase revenue and achieve a strong return-on-investment. But until you get there, there can be a long and sometimes bumpy road ahead. Many hotels nowadays fall short when it comes to meeting their financial goals and they are likely to fail. This can be traced back to a multitude of reasons, therefore, we went into a few of the most important reasons hotel investments fail, along with our friends at TrustYou.

During the years, the TrustYou guest feedback platform has provided the company with interesting insights into the hospitality business and their expertise in the field of reputation management adds valuable data to this equation, meant to help hoteliers avoid losing capital and opportunities.

Let’s dive into these 5 reasons why hotel investments fail and how you can make sure that yours don’t:

Not considering guest feedback

Whatever business you are leading, and especially when it comes to hospitality, you need to be aware at all times that you are providing products and services to an audience. That audience becomes your boss. A genuine care for the well-being of your guests can get you far ahead and make the difference between a successful business and one that’s more likely to fail. That care includes taking feedback into consideration during the entire guest journey. It’s important to not just take a superficial look at the reviews that you get and offer generic replies, but to also break down and analyze the feedback. Be aware that your guests are giving you valuable information about which parts of your hotel work and which don’t.

From a management position, you might not notice that the wifi is too slow, for example; but from a guest’s perspective, that might be the case and this is a great way of pointing out where your next investment should be directed toward. Always remember that major investments are done for the guest. There’s no point in wasting money on features that guests don’t care much about when you could be improving something that actually weights a lot in the eyes of your customers.

Not following trends

Being able to adapt to different situations and easily transition from one technique or strategy to another is a great asset, especially when you are in a management position. Hospitality is quickly changing, mostly due to technology innovations and its implications in the business and, as a manager, you need to be able to constantly follow up. Hotel investments need to be directed towards new and innovative services and features that guests are more drawn to every day.This is no longer question of want but rather it has become a necessity. The modern traveler demands smart rooms, in-room technology, real-time communication, voice-activated features and the list can go on.

As an example, TrustYou’s guest feedback platform is constantly developing new features, in order to keep up with guests’ demands. Their messaging feature now enables voice-messaging, which is done through Amazon Echo’s virtual assistant, “Alexa”. This allows hotel guests to ask for an receive information in a quick, easy, effective and why not, trendy way. Whether you are personally tech-savvy and passionate or not, technology is definitely an area in which your finances should be invested in and not following up with the trends can mislead you into spending money for the wrong services and features.

Not monitoring performance and past investments

In order to make it big in the future, you need to assess the past. Unless you are completely new to the hotel business and you are just opening up an establishment, in which case you can go for the trial-and-error approach, it’s important to look into your past investments and experiences, to see exactly what worked and what didn’t. You might have invested a great deal of money into an indoor pool, but if you are located in a place that is warm a lot of days in the year, does it really pay off? Or were guests enjoying the outdoor pool more? Speaking of guests, once more, they can represent the key to the equation. Their experiences, insights and feedback can provide you with valuable information.

The feedback platform provided by TrustYou displays a sentiment score, given by the analysis of guests’ impressions regarding different features of your hotel. It’s a quick and effective way of unveiling those exact areas in which you can improve and further invest in. For example, if you have a low food and beverage sentiment score, you might want to consider investing more in the quality of the products and maybe add more diversity to the menu. A study conducted by TrustYou and NYU revealed that hotels with higher scores can increase their nightly rate: in one example, given several options, 47% of respondents chose the hotel with the highest average review scores, even though it had the highest nightly rate. Quality over anything.

Not being on top of the competition

It’s a tough world out there and when it comes to hospitality, competition is becoming more and more intense everyday. It’s highly encouraged to create a unique style for your hotel and come up with new and different concepts, in order to attract guests, however, make sure not to fall short to the competitors while at it. Sometimes, standing outside the crowd and not paying attention to what the others are doing may be a bad thing. Keep a close look on the competition, see what other hotels are doing, where the hotel’s invest, and what trends do they follow.

Take some time and investigate, read about the overall business, about what’s new, what’s fading away, and what works for who. Check out case studies from your competitors and see what strategy they adopted in order to come up with better results, more revenue and an increased guest satisfaction. Stealing a few ideas won’t be punished by law and they might even inspire you further on.

Not making the most out of direct bookings

It’s no secret that hotels and OTAs need to shake hands from time to time and collaborate in order to drive bookings. Given the extent of which the online world has come to and how wide the internet is, it’s necessary to make sure that you are present on as many channels as possible. Any booking is a step toward meeting your financial goals and OTAs certainly do help in this matter, however, there’s no reason why you shouldn’t invest in more direct bookings and avoid paying commission to third parties, whenever possible. One of the best ways of driving direct bookings is ensuring that your own hotel website is properly optimized, has high quality content and visuals and it provides all of the necessary information for a traveler’s successful search-shop-buy journey.

Since the majority of today’s travelers look at reviews before booking a hotel, you should provide them with the desired content straight away, on your own website and avoid losing them to other platforms, which display reviews, as well as the option of booking. TrustYou’s platform provides features such as the Meta-Review, a summarized guest review content, that can easily be integrated on a hotel’s website. Also, you have the option of using widgets to display your overall score. Such pieces of information, when displayed in an effective and user-friendly way, can lead to direct bookings, since travelers don’t feel the need to consult other websites and platforms for additional info. They have everything they need in front of them and they can make a decision on the spot. This automatically saves you money that you would otherwise pay to an OTA and it can turn into a successful investment in the long run.


Patrick Landman @ Vojo