Major Issues Facing the Hospitality Industry in 2017 by Sara Mariani

Major Issues Facing the Hospitality Industry in 2017

Although the hospitality industry is currently booming, many studies have brought to light some issues that are currently being faced in the industry. These factors are limiting the current success of the industry and need to be overcome for the benefit of owners, managers, and staff. Here are some of the primary issues being faced right now.

Growth (i.e., Competition)

As the industry continues to grow, each business faces more and more competition. New businesses in the industry have to continuously be more and more competitive, proactive, and stand out amongst the crowd in order to make it against their more seasoned competitors. Meanwhile, just because a business has been around for a while, it doesn’t mean they’re safe from the ever-growing amount of competition.

Businesses in the industry, new or old, have to be constantly improving, changing, and listening to their customers. In a survey taken amongst staff and managers of hospitality businesses in Australia, 55% of respondents said the recent growth in competition has resulted in revenue loss. That’s a serious issue.

The competition is not going to stop competing, and the industry shows no signs of slowing down in growth anytime soon.


Waste is an issue on the global scale across multiple industries, but it most especially effects in the hospitality industry. With perishable food items going bad, businesses can quickly lose substantial amounts of money if they do not have the proper systems in place to use oldest goods first, store goods properly, and ideally, continuously sell items before they get to their expiration date.

Stock management teams can help businesses better plan and manage their produce and other perishable food items, and it can lead a lot of saved money when managed correctly. If you don’t have a system in place to keep track of what you’re buying, what’s being used, and what you’re throwing away, you are risking losing a substantial amount of money that could easily be saved and invested elsewhere.



Finding talented and qualified professionals who represent the image of a brand is always a tough battle. Hiring the best staff is essentially one of the most important aspects that determine a business’ success. No one will eat at a restaurant with bad service. No one will want to return anywhere when they felt they were treated rudely or hardly given any service at all.

54% of business owners said hiring and maintaining a good staff lineup was an on-going struggle. Whether workers are calling in sick on busy nights, taking too much time off, or simply not putting in the effort, this has a direct and instantaneous effect on a business success.

While it would be ideal to hire staff right out of the gate who are already well-trained in the profession, all a business really needs to focus on is hiring staff who are willing to work hard and learn. Put aside time to properly train each worker and have systems in place that allow workers to report on less-than-satisfactory trainees without worry about seeming biased. Group meetings, one-on-one meetings, and anonymous ways to hear from your staff allow you to keep things running smoothly and provide fair, unbiased judgment against your workers.

Operational Costs

Every industry has its own costs associated with it, but the overhead for hospitality is particularly high, with the need to stock a multitude of perishable items, pay wait staff even when you might only have one or two customers come in (or no one), and always have the lights, kitchen, and storage facilities up and running. Between climate control and entertainment (TVs, etc.), just daily operational costs can quickly add up when the bills come around at the end of the month.

But, on top of those things, operational costs like penalties, taxes, and fees also pile up in no time. Hospitality businesses may be taxed at the local, state, and federal level depending on their specific operation. In addition to paying staff, bills, and taxes, they may also have to pay credit card interest and loan interest rates, penalty rates in certain jurisdictions, and, of course, licensing fees that may need to be renewed on an annual basis.

These business costs add up quickly, and can take down a business if they are not properly accounting for every expense.

Customer Acquisition

Of course, every business owner in every industry faces the issue of customer acquisition. Finding and keeping customers relies on good products, good service, and fair pricing. Without all three of these things, customers are quick to write off a business—and even spread bad word-of-mouth advertising if any one of those three things drops from average to bad.

The best type of marketing are good word-of-mouth ads, shared amongst friends and family members. People are much more likely to come to your business after hearing good things from a friend or colleague than they are just from watching a short ad on TV. That means having stellar service and over-the-top great food is essential to not only spreading the word about your business, but keeping customers coming back happy again and again.

Your staff might have an off-night sometimes, but you shouldn’t but all of the blame on them. As the business owner, it’s your responsibility to be monitoring the operations, deciding who on your staff is the best worker (and giving them an incentive for that) and managing those who are not so good workers. While you don’t want to constantly be bringing in new trainees, you do need to keep an eye on your staff and clear out anyone who is not putting in the effort to keep customers happy.

With these things in mind, businesses will be able to thrive in the hospitality industry.

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