Why Hotels Fail



Hotels Fail For Many Reasons, Here are a few:



         Underestimating the difficulty of establishing a new hotel business

·        No practical hotel experience

·        The hotel doesn't have “that thing" that makes it special

·        Owners and Managers don't understand how to market their property

·        They don't have the money to get by during the off-season

·        They underestimate their competition

·        Community disconnect - sitting in the back office

·        Not actually admitting failure and taking to long to do something about it

·        Absentee owners, with passive onsite Managers

·        Unmotivated employees, asleep at the wheel

·        Ownership that has sucked out the profits for an extended period of time

·        Pushed out of  the market of best to second-best by a new or renovated hotel

·        Boring old-world menus – when there is an Applebee’s down the street

·        Addition of a sister-brand from their franchisor shoved into the same market

·        Employee theft

·        Dye the carpet and raise the rates mentality

·        Giving comp rooms to make up for poor service and bad housekeeping 

·        An owner with a 5-year exit strategy matched with a franchise for 20 years

·        Dated rooms and common areas

·        Over extended financials

·        Free Continental Breakfast - fit for a wedding reception

·        Franchise PIPs based on sheep mentality of "monkey see - monkey must copy"


Hotels do not fail on their own. Yes, the owner of a property takes some blame. But blame can also be placed on the doorsteps of the franchise they signed up with. The hotel franchise industry is cut - throat. Have you ever noticed that at the end of each quarter, you get a call from corporate asking if you can give them another “Deal”?  It’s all about the money, it’s all about “open rooms”, it’s all about how much money they can squeeze out of you.

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