Short posts for hospitality consultants and those considering transitioning to hotel consulting and the industry it serves.
Why Some Hotels Fail
While most failures occur in a down cycle, many have failed in good times. Over a period of fifty years the industry has experienced ample up and down cycles to trace the causes to several factors including:
- The hotel was not built to accommodate the prevailing market nor repositioned when conditions shifted.
- The strategic business plan was never adjusted
- Capital replacement needs were deferred
- Unrealistic marketing and sales plans
- Unrealistic budgets driven by owner or home-office expectations, as opposed to local experience
My experience has seen a number of hotel failures due to over leveraging that burdens the enterprise with a debt service that cannot be met regardless of strategy.
Thinking About Becoming a Hotel Consultant ?