Nine Root Causes of Procrastination in the Hotel Industry and How to Overcome

Anyone who has worked in the hotel industry long enough will relate to the fact that when they stay in hotels themselves, every detail of service and product is amplified and overtly noticeable.

Sometimes this can serve us well when the experience is well executed. However, when faced with untrained staff and substandard service levels, hotels stand out for the wrong reasons. But it's the lack of progress with technology and countless missed sales opportunities that capture my attention most. I often feel like I'm stepping into a time machine as I transition from a seamless digital airport, dining, and taxi journey to the archaic, vanilla, and laborious hotel arrival experience.

So why do hotel leaders procrastinate when the solutions are all readily available?

For my professional speaking business, I travel a lot and frequently stay in hotels across the US. Each time I queue to check in and then wait impatiently while the receptionist franticly types away staring into their computer screen abyss, I am reminded of the distinct lack of readily available technology to speed up, or automate the process. Every time I am presented with a piece of paper explaining the free bike tours, Wi-Fi, and two standard drinks per day included in the $40 per night resort fee, yet not offered a suite to buy up into or a late check out to purchase, I am perplexed how any hotelier could consider a forced resort fee "hospitality".

This drives my curiosity as to what leads hotel decision makers to procrastinate against low hanging fruit like an appealing upsell program or installing a modern property management system (PMS).

In 2015, I led a major technology overhaul for a group of 30 full-service hotels. The commercial upside was compelling stretching into seven figures and the customer reaction was overwhelmingly positive with review scores rocketing as the model was rolled out. In parallel, a focused, structured ancillary revenue strategy was implemented (in under a day!) that delivered almost seven figures collectively.

So, if the commercials make sense, the technology is readily available, and customers approve, what obstructs most hotel companies in our industry from taking decisive action against these blatantly obvious wins?

In my experience it is one, or several, of the below nine factors:

1. Risk Aversion: A Blockade of Innovation

Some hospitality leaders might be hesitant to take risks, especially if the organization is currently stable. The fear of potential failure and its repercussions can lead to stalling and ultimate inaction.

A classic example of risk aversion stifling potential growth can be seen in larger brands. During my time in global companies, I witnessed many people who simply kept their head below the parapet to avoid extra responsibility and maintain their monthly paycheck rolling. I can somewhat understand why they did that but this type of culture leads to sustained inaction and makes them susceptible to challenger brands.

A more common example of risk aversion is maintaining status quo. The old adage of 'if it ain't broke, don't fix it' certainly rings true in my experience at Village Hotels. Our technology project was met with a lot of internal resistance and delays for the fear of changing a process that wasn't necessarily broken, but simply outdated.

Creating a culture of ongoing evolution and an acceptance that some changes will experience teething problems, is critical to overcoming the risk aversion syndrome. Building a foundation that rewards innovation, both personally and financially, will cultivate a desire for seeking better ways of operating.

2. Misalignment with Core Goals: The Strategic Divergence

If the opportunity does not align well with the organization's core goals and strategies, leaders might be hesitant to pursue it.

An instance of this can be seen in the luxury hotel market. Understandably, luxury brands place a high emphasis on the personal human touch. Technology is often interpreted as dehumanizing the experience. Similarly, luxury operators fear offering ancillary items due to the risk of appearing overly 'pushy' or 'penny-pinching' for luxury guests. Conversely, offering a beautiful suite or the luxury of staying in the room a few extra hours subtlety delivered at the appropriate moment can add immense value to the guest experience.

The luxury segment often view their guests the way they want to see them and not as they are. I, and many other mere mortals, stay in luxury hotels and have no desire to queue and wait for the receptionist while they stare blankly at a computer screen.

3. Resource Constraints

Sometimes, the resources required to pursue a growth opportunity (like a PMS change, or ancillary revenue strategy) might be lacking, hindering action. We get busy, being busy and leave no room for assessing projects that could have big returns.

I was consulting to UpsellGuru in Q4 of 2021 and reached out to an old colleague about implementing their program. He expressed a strong eagerness, however, he wrapped up the conversation saying he would be ready to move forward in Q1 of 2023! More than 1 year later, missing out on what would easily have been 7 figures of upside.

Carving out room for innovation, or keeping pace with the market, is often overshadowed by the day to day grind. In reality, there will always be a budget season around the corner or end of month in full swing so hotels must improve their ability to assess and prioritize returning projects over an above their day to day duties. If the project has a significant commercial upside, like technology and ancillary revenue, then employ the services of proven consultants ready to help deliver the profit.

4. The Myopia of Short-Term Goals

Leaders often focus on short-term goals and immediate results, which can cause them to overlook or deprioritize long-term growth opportunities.

A notable example is when major wholesalers, focused on immediate profits, failed to invest in online platforms, allowing Expedia.com and Booking.com to dominate the e-commerce space. This short-term focus led to long-term struggles for many traditional wholesalers.

Global brands fall into this category too especially on the PMS vendor selection. Their loyalty program revenues takes precedent over guest experience. Innovative partners are restricted in order to protect the seamless automation of their points programs. A point I understand needs protection, but there appears to be little desire to consider the guest.

Hoteliers that get stuck in the weeds and turn a blind eye to shifting market dynamics, risk finding themselves uncompetitive in the very near future.

5. Invisible Chains: A Culture of Resistance

A culture that lacks flexibility can make it difficult for leaders to implement new strategies or ideas.

When we look to other industries, Nokia's decline in the smartphone market is often attributed to an organizational culture resistant to change. Despite having advanced technology, Nokia's leadership could not pivot their strategy in time to compete with smartphone innovators like Apple and Samsung.

Hotel companies that promote an agile culture have the opportunity to outpace and outperform their competitors by acting decisively. Promoting an agile culture requires a new model of corporate decision-making; one where taking timely decisive action, collecting live data, and adjusting accordingly rules the day.

Act, Learn. Iterate.

6. Decision Paralysis: When Information is a Maze

Decision-making requires accurate and comprehensive information. Without it, leaders may be reluctant to act due to uncertainties.

During the initial stages of the COVID-19 pandemic, some leaders in the hospitality industry were slow to respond due to a lack of clear information and analysis on the situation, resulting in significant losses. They waited for more information which was being drip-fed gradually - a classic cause of indecision.

Those that pivoted quickly and sought new revenue streams with the data they had at any given time, ultimately came out with the least debt and gained an advantageous financial position.

One example was the need to accommodate the homeless. On the day after the shutdown was implemented in the UK, I was contacted by a senior English government minister requesting support to accommodate the homeless. I subsequently contacted many hotel owners who declined the business. The few that did accept to help, kept their hotels open, maintained their staff, and had positive cash-flow. They didn't require loans and they continued to deliver profit.

Very few business decisions are terminal. Most decisions can be pivoted as data evolves. Hotels would be better served to act promptly with the data they have at hand, measure, and adapt.

7. Personal Limitations: The Leadership Ceiling

Leaders might have personal limitations such as lack of expertise in a certain area, time constraints, or other commitments that restrict their ability to act.

Personal limitations of leaders can be seen in cases where CEOs, excellent in traditional business models, struggle to adapt to the digital era, thus hindering their companies' ability to capitalize on new digital trends.

An ambitious, confident leader unafraid to fail fast, with a calm demeanor and commercial mindset is necessary to perform at the highest level in the era of data and AI. This is why I am a firm believer in Revenue Management professionals moving into the C-Suite.

8. The Thorns of Internal Politics

Sifting through a maze of internal politics and power dynamics can be challenging. Leaders might be cautious in their actions to avoid upsetting key stakeholders or power centers within the organization.

While not hospitality, Yahoo's decline is a textbook case where internal politics and power struggles led to a series of missed opportunities and strategic missteps, severely impacting its competitive position. A cohesive and confident team that does not need to compete internally will be best placed to adopt new technology and commercial strategies.

9. Regulatory Labyrinths: The Compliance Conundrum

Sometimes, the potential for growth might involve navigating complex regulatory environments or compliance issues, which can be a deterrent.

Data Protection and first party data challenges can play a role here for hoteliers. Navigating the complex world of data privacy across geographies shouldn't prevent progress, but it often does. The laws are not designed to inhibit growth; they exist to protect customers so acting with positive and consciences intent, ensuring the tail is not wagging the dog, is the key to driving progressive innovation.

My hope is that some day I can breeze out of the airport in the Uber that I booked using an app on my phone, buy a nice bedroom upgrade on the journey from airport to hotel as I register, digitally receive the instructions to find my room ahead of arrival, then confidently wander into the hotel lobby when I arrive, strut towards the lift, and go directly up to the comfort of my hotel suite.

Who knows; in a utopian world, perhaps they even have a record of who I am and what I like...

About the author: Rob Paterson was a 15-year veteran of Revenue Management before entering the C-Suite and eventually being named CEO of Best Western Hotels Great Britain in 2018, a role he occupied for almost 4 years. He now resides in the US and is the founder of the Grind Leadership Academy and Elite Revenue Management Community. To learn more about how Grind Leadership Academy can help elevate yours' and your company's performance, check out the services page and schedule a call or join one of the upcoming podcasts listed below.

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