11 Myths in The Hotel Industry Debunked With Facts and Figures

I’ve been associated with the hospitality industry for almost 10 years. During this time, I’ve seen and faced many challenges. Of those, there is one I distinctly remember. 

I was working as a business development manager (BDM) for a reputation management firm. As a part of my role, I was supposed to meet the key decision-makers at the hotel.

Once I was pitching the reputation management software to the owner of a renowned hotel in a remote location. And this is what he said :

“All these software are almost the same. We took a PMS almost a year back and investing in a software to manage review is not something we need. My hotel’s staff replies to the feedback we receive. Plus, I don’t feel these reviews have much effect on our business.”

I was taken aback at the response and began to wonder how people can have such notions. In fact, when I met a few more hoteliers, I realised that they are plunged into a deep sea of misconceptions. 

And it’s not just about the reviews, there are various myths in the hotel industry that create hurdles for hotels.

In this blog, I’ll debunk some of those infamous hospitality industry myths and share the reality behind them.

Widely Believed Myths in the Hotel Industry

Talking about the commonly believed myths in the hotel industry, most of them are pertaining to technological aspects and marketing strategies. The reason could be lack of knowledge, word of mouth, or reading and understanding half-baked information from the internet. 

Let’s take a look at some of the widely accepted myths in the hotel industry that need to be busted right now.

1. Myth: Technology will take away jobs

There’s no doubt that technology has made our lives easier. However, one of the common myths about technology in hotels is that it will take away hoteliers’ jobs. 

For instance, many hoteliers believe that robots will replace human staff in hotels, leading to a scarcity of jobs in the hospitality industry.

Truth:- 

First of all, you need to understand that technology is just a tool that makes our lives easier. Let me explain it with an example.

PMS is a tool that is helpful in effectively managing hotel operations. One of the important tasks in any property is maintaining guest records. Now, before PMS came into existence, this task was done manually.

The automation brought by PMS has made this task simpler. There are various software that can capture data just by scanning OCR code.  This helped in saving a lot of time for hotel staff and they can focus more on improving guest experience. Plus it didn’t take away the jobs of the front office staff.

Similarly, by adopting various technological solutions at your property, you can make your processes easy and efficient.  

2. Myth: Investing in revenue management is expensive and futile

Talking about revenue management systems (RMS) and revenue managers, it’s no doubt that they help in improving hotels’ business. However, there are certain myths about revenue management. Among them the common ones are: 

• RMS or hiring revenue managers is a costly matter.
• It is only necessary for luxury and high budget hotels. 

Let me tell you the reality about them.

Truth:

See, the factual reality is that revenue management is a MUST for hotels. Be it having a system, hiring a revenue manager, or both. Furthermore, revenue management not only aids in boosting a property’s bottom line but also helps in finding the loopholes. 

Not to mention, there are various RMS providers with flexible pricing plans that help you go lighter on your wallet. They create customised plans as per your requirements, property size, average tariff, and other such aspects. This means that even if you are a budget property, you can invest in RMS without burning a hole in your pocket. 

3. Myth: Giving maximum discount can increase bookings

I have seen many hoteliers saying that guests book properties with slashed up tariffs or ones that offer extremely low rates. That’s because of the heavy discounts given by OTAs and aggregators.

Truth:

I would say this is partially true. I mean, giving discounts is definitely a good strategy to attract guests. But the question is up to what extent?

For example, OTAs generally tend to give a discount of 50-60%. This, when clubbed with bank offers, the amount paid by the guests is slashed drastically.

Now for hotels, giving such deals and discounts is literally not possible. There are two reasons:

1. It would incur a terrible loss.
2. Guests will demand such discounts while booking the property again.

If you want to give discounts, I’d suggest doing it in the form of packages. That’s because when you club certain additional things like a meal plan, discount on paid services, or activities, the rates seem more valuable to guests.

Thus, when they compare direct rates and the ones on OTAs, the weightage of packages would be more. Alternatively, if you want to give discounts on bookings, you can use the commission amount or percentage of tariff which is charged by the 3rd party platforms.

4. Myth: OTAs are better than direct bookings

It’s no secret that OTA’s drive a good amount of bookings. But, this point has made many hoteliers believe guests book only from OTAs, and the scope of direct booking is negligible, leading to a debate about OTA vs direct bookings.

Truth:

To be honest, OTAs do drive maximum bookings. However, they act as a mediator between guests and hotels. And these days, hotels are more concerned about their relationship with guests. 

So, the guests need to contact the respective OTA if they have any issues with the property. But because of this elongated communication process, the resolution of the same does take time.

Due to this, the guest experience is hampered. Hence before booking any property, travelers connect with that hotel’s reception to see if they can get better rates, upgrades, additional facilities, or for generic queries. Trust me, I also do this.

Here’s a statistic shared by Guest Centric in their ‘Hotelier Pulse Report’ that will act as a cherry on the cake,

 Direct bookings have grown exponentially by 78% in 2021 compared to 2019. 

So, you see that direct bookings are definitely winning over OTAs. All you need to do is maintain the right balance while distributing your hotel’s room inventory. 

5. Myth: Do what your competitors are doing

Often hoteliers believe that copying what their compset is offering is the right thing to do. They think it would help in attracting the guests of the competitors. And this is not just limited to offers, it applies to marketing strategies as well.

Truth:

I know, you might be wondering that I’ve written in most of the blogs to learn from your compset. But what I meant was TAKING A CUE; not blindly following what they are doing.

See, every hotel has its own uniqueness. Be it in terms of room interior, facilities, offerings, services, and other such aspects. Based on these factors, they have different tariff structures as well as annual revenue goals. Hence, the strategies or deals used by them may or may not work for you.

As a matter of fact, these days guests look for hotels providing a unique experience. So, I’m not asking you to avoid competitors, all I’m saying is to use your specialties to get an edge over your compset.

6. Myth: Reviews and reputation management are not important 

As I said initially in this blog, many hoteliers assume that reviews don’t hold enough importance in terms of increasing a property’s booking flow. They think reviewing websites are partial when it comes to guests’ feedback.

Many of them even believe that replying to reviews is futile, as viewers checking out the property believe in the feedback rather than understanding the real scenario behind it. 

Also, there is another myth in the hotel industry that reputation management tools help only in replying to reviews.

Truth:

Feedback in hotels is as important as critic reviews about any movie. Everyone has different experiences about a property (positive and negative). Now, these reviews act like a mirror to guests who are looking forward to booking that hotel. 

Here are some stats by TripAdvisor for backing up my statement,

• Around 96% of travelers believe that reviews are an important factor while researching a hotel.
• 91% millennials trust online reviews, just like they consider a personal recommendation.
• Up to 85% travelers agree that a logical and honest response on reviews denotes hotel’s thoughtfulness and improves the overall impression of the property.

Now, talking about the reputation management software, it does help in collecting and showing the reviews from every online booking portal. However, there are various other important tasks it can help you with. This includes,

• Review analysis
• Online reputation score calculator
• Review flagging
• Hotel’s online performance report
• Analysing and providing areas with the scope of improvement

7. Myth: One marketing campaign can cater to all guest segments

I don’t know who started this, but I’ve heard hoteliers saying to digital marketing agencies, “Create one marketing template and share with us. We will promote it among all the guests with the data we have.”

As a matter of fact, I’ve received calls from many people asking me to create a marketing template for their guests. Since I was aware of how marketing works, I tried to convince them that the same template won’t work for all the guests. To which their reply was, and I quote,

“All the guests are the same. You just create one attractive ad/template/content for our property. Mention all the good things, offers, and amenities. We’ll take care of the rest.”

Well, in the end, I did as asked. I’ll tell you what happened next, after uncovering the reality behind this myth.

Truth:

Firstly, not all guests are the same. Every traveler has a different comfort zone, requirements, purpose of travel, budget, and other such aspects. 

Before you invest in a marketing campaign, you need to learn about understanding your guest segment. Once you do that, you should be investing in vivid marketing campaigns, either personalised or mass marketing.

Secondly, every campaign has to be unique and MUST highlight the points that can cater to the particular guest segment. For example, if you have an influx of business travellers, ensure that you focus on services like Wi-Fi, half board meal plan, and conference room facilities. 

Now, let’s talk about the story I told earlier. I received a callback from those hoteliers stating that the campaign didn’t give the expected results. And they agreed to go ahead with my suggestion with required tweaks.

8. Myth: All software are same

There’s another common myth in the hotel industry that all the software is one and the same. Like I said in the beginning of the blog, hoteliers feel that every software has the similar benefits and usage. And investing in a single one can cater to all the aspects of a hotel.

Truth:

How? I mean, how is it possible? Here’s a simple reference of PMS and channel manager for everyone’s understanding.

As I said earlier in this blog, PMS is property management software that assists in managing operations of your property, such as payment updates, bill posting, accepting bookings, settling guest folios, and so on. 

On the other hand, the channel manager automatically updates your room inventory in real-time on all sites.

I hope you got the difference. I know there are thousands of hospitality products in the market, and one might think that they are all the same. But in reality all are different and service specific purposes in the hotels.

9. Myth: Building a website is costly and time-consuming

I would have believed in this if we were living in the early ’20s. Because at that time, having an internet facility was no less than a luxury in hotels. During those days, building a website was a tough task as it required a lot of knowledge in coding and graphic designing. 

But believing that building a website these days is costly and time-consuming is just one of the common myths in the hotel industry. Let me tell you why.

Truth:

Nowadays, there are multiple self-help software that can assist you in building a website easily. They even offer customisable themes that can make your website look attractive. 

In fact, the websites are pre optimised for necessary features like white spacing, website map, CTA (Call to action) buttons and so on. Additionally, many website builders have an option of easy updates, where the admin can directly post any marketing campaign, blog, articles, or offer through WhatsApp and email. 

As far as the costing is concerned, there are website builders that have flexible payment policies. And most of them even offer a free trial. 

It’s time that you stop believing in this myth and build your hotel’s website, RIGHT NOW.

10. Myth: Star category can be updated as per guest ratings

When I used to work in an OTA, I had an argument with a hotelier over star ratings. According to him, the property was a 4 star, since guests had given it an average rating of 4 star on every portal.

This is one of the common myths in the hotel industry that the star category can be updated according to guest ratings.

Truth:

First of all, ratings and star categorisation are two different things. When you say ratings, they are provided by the guests to your hotel and the services as per their experience. And it does not certify the stay category of your property.

The star categorisation of hotels is done by the governing bodies of the hospitality industry in each country. It depends on certain factors, like room amenities, services, room inventory, location, and so on. 

This star categorisation also decides the rack rate of a property. So, if you have updated an incorrect star rating based on user/guests reviews, you need to change it now.

11. Myth: Working with hotel aggregators is not at all feasible

I’ve kept this myth for the final showdown. ‘Working with hotel aggregators is profitable or not’, is one of the trending topics in the hospitality industry.

Some say it’s good, while others say it’s a loss. But the question is, what is the truth?

Truth:

I’ve already done a detailed article on hotel aggregators and in that, I’ve mentioned the pros and cons of working with them.

There’s no doubt that aggregators are profitable since they solicit hotels by giving them a fixed monthly revenue for the leased out inventory. In case they take the entire property on lease, they do renovate it as per their requirements at their own costs. Moreover, they take care of training the staff as well, to improve the guest experience. 

As they say, every coin has two sides. This applies to aggregators as well. Many hotels have reported cases of delayed payments and the market being changed drastically, owing to the meager tariffs offered by 3rd party property managers.

So, whilst you chose your side, it’s important that you brush aside the myth that working with aggregators is not feasible.