Navigating the Big Challenges in Hospitality: How Accommodation Providers Can Build Resilience
The accommodation sector sits at the heart of the hospitality industry, but providers today are navigating one of the most challenging landscapes in decades. Rising costs, shifting guest expectations, and tighter compliance regimes are all squeezing operators. Yet, with challenge comes opportunity: the providers who lean into innovation, data-driven planning, and agile leadership will not only survive but thrive.
Here’s a closer look at the key pressures facing accommodation providers—and what leaders can do to address them, with lessons from real-world operators.
- Rising Food & Beverage Costs: From Reactive Cuts to Proactive Value Creation
Food and beverage (F&B) services are a cornerstone of guest experience, but escalating ingredient and supply costs are compressing margins.
Forward-thinking providers are instead:
- Negotiating smarter with local suppliers. For example, Ovolo Hotels in Australia shifted toward partnerships with local farms, reducing reliance on imports and strengthening brand authenticity.
- Designing seasonal menus that use cost-effective produce while still offering a premium feel, a tactic Soho House uses across its global clubs.
- Leveraging data to track waste and reengineer menus—similar to how Accor rolled out food waste reduction technology across properties.
The winners will be those who turn food cost challenges into opportunities to create memorable, sustainable dining experiences.
2. Labour Shortages & Talent Retention: Building Loyalty Over Compliance
We all know the industry has experienced staff shortages since COVID. Staff with many years of hospitality experience have left the industry unfortunately. And the low hourly rate makes it even more difficult to attract skilled staff. If business is overusing AI, some guests might not be happy with the lack of personalised service.
3. Seasonal Cash Flow Fluctuations: From Survival to Strategic Planning
Peaks and troughs are a reality, but providers are finding creative ways to balance cash flow.
- Thredbo Alpine Resort extends its seasonality by promoting mountain biking, hiking, and wellness retreats outside of ski season.
- Airbnb hosts in seasonal locations diversify with flexible pricing models and targeted off-season campaigns.
These examples show how shifting from “seasonal survival” to year-round strategic planning unlocks untapped revenue streams.
4. Expansion Risks: Scaling Smart, Not Fast
Growth is tempting, but rushed expansion can destabilise a business.
IHG Hotels & Resorts tests new concepts (like “avid hotels” in the US) in select markets before rolling out globally, reducing risk. On the boutique side, QT Hotels expanded slowly across Australia and New Zealand, carefully tailoring each property to its local market rather than replicating a one-size-fits-all approach. Smart growth is about timing, market fit, and financial modelling—not just chasing new postcodes.
5. Compliance Pressures: Embedding Systems, Not Firefighting
Regulatory obligations—from liquor licenses to payroll—can overwhelm providers.
Marriott International, for instance, integrates compliance training into daily operations, framing it as part of service excellence rather than an administrative burden. Smaller operators are adopting digital platforms like Deputy and Xero to automate payroll and record-keeping, turning compliance from a headache into a streamlined system. Embedding compliance into culture and technology not only reduces risk but also strengthens brand trust.
6. Guest Review Management: Turning Criticism into Advocacy – Online reputation is everything.
Hilton Hotels has a dedicated guest relations team that responds to reviews across major platforms, ensuring no feedback goes unanswered. Independent boutique hotels often excel here by crafting highly personalised responses—transforming criticism into an opportunity to showcase service recovery.
The strongest operators don’t just reply to reviews—they treat them as live data to continuously refine guest experience.
7. Seasonal Demand Variations: Localisation as a Competitive Edge
Location dictates demand cycles, but creative providers use this to their advantage.
- Whistler Blackcomb Resort in Canada attracts conferences and festivals in summer, offsetting reliance on winter ski tourism.
- Wellness resorts in Bali pivoted during COVID by marketing long-stay “workcation” packages to digital nomads, diversifying demand beyond traditional tourist peaks.
Demand variation doesn’t have to equal revenue variation if providers localise their strategies and stay agile.
Final Word: Leadership Beyond Operations
The hospitality industry is under pressure, but challenges are also catalysts for evolution. Accommodation providers who embrace innovation in cost management, build cultures that retain talent, embed compliance seamlessly, and anticipate rather than react to seasonal swings will emerge as leaders.
The lesson from global giants and boutique operators alike is clear: resilience comes not from avoiding challenges, but from reimagining them as opportunities to differentiate, innovate, and lead.
I’d love to hear from you — what’s the biggest challenge your business is facing right now, and how are you tackling it?
