Challenges of the Hospitality Industry

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  • 0:02 Hospitality's Challenges
  • 0:36 Change in Customer Segment
  • 1:51 Changes in Technology
  • 2:41 Political Tensions & Terrorism
  • 3:19 Lesson Summary
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Lesson Transcript
Instructor: Savannah Samoszuk

Savannah has over eight years of hotel management experience and has a master's degree in leadership.

The hospitality industry is a fast-changing and multifaceted industry. This lesson will look at some hospitality industry challenges, such as changing customers and technologies. Read on to learn more.

Hospitality's Challenges

The hospitality industry is also known as the service industry. It's made up of many different types of businesses that provide specialized services to customers and includes hotels and resorts, restaurants, and airlines, among others. The main goal of the hospitality industry is to provide customer satisfaction. There are many factors that change quickly that impact the hospitality industry. Some of the challenges faced by the hospitality industry are changes in customer segments, changes in technology, and rise in political tensions and terrorism.

Change in Customer Segment

For years, the majority of travelers have been Baby Boomers. More recently, there's been a shift in the customer segment for the hospitality industry. Interestingly, it is estimated that by 2025, Millennials will make up about half of travelers. This presents challenges for the hospitality industry, which has been used to catering to Baby Boomers.

This change in customer segment means that businesses in the industry have to change the way they do things. Baby Boomers are known for being loyal to a brand or chain. The new generation of travelers has been known to support local and independent businesses. This presents challenges for chained businesses to attract and keep these customers. Another challenge with the new customer segment is that they expect to be connected at all times. This means that hotels have had to change their Internet policies and make sure they provide satisfactory Internet. Even restaurants often have free Wi-Fi for customers. This change has helped accommodate the new customer segment. Also, Millennials are a generation that like to be rewarded and recognized, which has presented challenges for businesses. Some companies have frequent user programs that offer rewards. However, companies have to keep implementing and changing programs to make sure they are satisfying their customers.

Changes in Technology

Another challenge in the hospitality industry is the quickly changing technology. Over the past decade, technology has changed and keeps changing. This presents challenges especially for hotels, restaurants, and airlines to keep their technology up to date. They need to be able to offer the technology that customers expect.

For example, many customers expect to be able to bypass the hotel front desk and access their room with an app on their phone. This presents the hotel with challenges of making sure that their technology can handle this and keep customers safe. Additionally, customers want to be able to make reservations for restaurants through mobile technology and avoid having to reserve a table at the host or hostess stand. Since the restaurant will hold tables for such parties, logistics can become difficult if a mobile reservation does not show up.

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