Reasons why independent hotels fail

Reasons why independent hotels fail

As experienced independent hoteliers know well, operating a hotel is serious business – not a passion project or weekend hobby.  Independent hotels operate 24/7/365 and require expert management across multiple functional areas, including hiring, training, marketing, accounting, customer service and asset management.  And with travelers constantly circulating through the property, there will always be unexpected challenges that operators must quickly solve to ensure their guests have the best experience possible.

With the complex nature of hotel operations, some independent hotels will inevitably fail due to various reasons and circumstances.  To gain insight on this topic, we reached out to some of our independent hotel clients and asked why they believe some hotels fail.  Here’s what they shared:

I think it is because “owners” take on more than they can. Some have never run a business and think it’s easy. They think people just check-in and check-out, but there is so much more to it than that.

As we mentioned above, running a hotel is much more than checking guests in and out.  Successful independent hotel operators are usually “jacks of all trades” who have a solid understanding of every facet of their business.  If they are not particularly strong in an area, they usually understand how to build a team of talented individuals who can help support their weaknesses and contribute in the ongoing success of the property.  Independent hotels are the sum of many parts and it’s the responsibility of the operator to ensure all parts remain in top working condition.

Our experience with failed neighboring independent hotels seems to be the result of inexperienced marketing strategies.  Most are old school and rely mostly on past guest referrals and walk-in guests.  While we utilize these avenues, we also rely on booking engines, our website, referrals and returning guests.  We appreciate retention, but additional work is required to achieve healthy growth trends in the way we operate our properties.

  • Barbara Joia, Manager, Robert Cius P.A.

Marketing is an area where many independent hotels lack the strategies and systems to attract the guests needed to support their long-term growth.  In the past, simply placing a neon vacancy sign outside of a hotel was all that was needed to attract travelers who needed a place to stay.  Today, not only has marketing moved online, but it’s segmented, multi-channel and has global reach via websites, online travel agents, email, mobile sites and apps and social media.  If independent hotel operators want to achieve long-term success in today’s digital world, they must educate themselves on modern marketing tools and tactics and then develop strategies to effectively attract guests, increase revenue and drive profits to the bottom line.

Many independent hotels can avoid failure if they act fast when issues arise, rather than hoping things will eventually get better.  If your hotel is in need of operational support, contact our team to learn how innRoad’s fully integrated hotel management software can put your hotel on the path to sustainable success.


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