3 Huge Reasons Why Hotel Investments Fail
When people look at investing in commercial property they may consider the leisure, travel and tourism industry. These investments can bring in an incredible return, but like any investment the higher potential return, the higher potential risk. Find out why a hotel may not bring the return you want and why hotel investments may fail:
- Location, Location, Location
When thinking about investing in any sort of property you should always consider the location and the demographics.
For example, if you are looking into purchasing an old hotel in a rundown area, you will likely get the property for a great deal, but your business may not attract many customers. People may instead opt for a location that they consider safe or which has a higher tourist population.
If you were to buy a well-maintained hotel in a nice area situated near an airport, you could would likely attract people who are on business or travelling.
It is all about the location! There is a saying “you can rebuild a building, but God isn’t making any more land”.
- Customer Service is Poor
This one is huge for hotel owners in smaller areas where people usually return to visit near small lakes, national parks, music festivals, etc.
Customer service should be at the forefront of any business, as providing excellent customer service could make your business one to remember for new and returning clientele! A lot of your business could come from repeat customers and referrals and you want to make sure you really WOW them.
Make sure you’re always considering people’s feedback on your staff and/or hotel accommodations as the customer decides what works for your business not you.
- Marketing Tactics That Don’t Work
Nowadays almost everyone searches online for hotels in the area that they are going to be staying. I mean why wouldn’t you? It compares all of the hotels in the area that you want to stay in so you can find the best place.
The thing is, a lot of these hotel owners are confused as to why they aren’t getting business, but fail to do adopt new forms of marketing to drive sales. These could include creating a website, online business listings, search engine ads, etc. Instead, they stick to the old ways they are comfortable with like print ads or flyers (they definitely don’t work like they used to) and expect good results.
Like any business you must learn to adapt with the market changes, how people consume information and how they make purchase decisions. If not, your marketing tactics will be lacking and you will have a hard time gaining new business.