According to a recent survey by HSMAI Asia, the major challenges facing hospitality:
- Employee retention and labour shortages
This is arguably the #1 operational challenge.
Hotels continue to struggle with:
– High staff turnover
– Difficulty recruiting experienced people
– Housekeeping, F&B and front-office shortages
– Burnout and workload pressure
– Loss of experienced employees and the knowledge they take with them
– Increasing wages and agency labour costs
A 2026 hotel HR survey found 31% of hotel HR leaders identified employee retention as their top workforce challenge.
The bigger issue: hotels can recruit someone, but retaining them long enough to become genuinely productive is becoming increasingly difficult.
- Rising operating costs and pressure on margins
Hotels can have strong occupancy and ADR and still find profitability under pressure.
Major cost pressures include:
– Labour
– Food and supplies
– Energy
– Insurance
– Maintenance
– Technology
– Property costs
A 2026 hotel-owner survey identified high operating costs as the largest obstacle (37%), followed by talent shortages/skills gaps (35%).
This creates a particularly important challenge for GMs:
How do you reduce costs without reducing the guest experience?
- 3. Maintaining consistent guest experience
Guests expect more while hotels are often operating with fewer people.
That creates a difficult equation:
Fewer staff → greater workload → burnout → inconsistent service → poorer guest experience → poorer reviews → weaker repeat business.
Guest expectations are also changing rapidly, with technology making consumers accustomed to fast, personalised and frictionless service. Hotel Yearbook
- Burnout and employee wellbeing
This is closely connected to retention but deserves to be treated as a separate challenge.
Hotels are unusual businesses because employees are constantly interacting with customers while dealing with:
– Peak periods
– Irregular hours
– Staffing gaps
– Emotional demands
– Complaints
– High service expectations
– Pressure from management
When experienced people leave, the remaining team carries more of the workload, potentially creating a turnover/burnout cycle.
- Productivity and doing more with fewer people
The industry is under pressure to improve productivity without compromising service.
Technology and AI are increasingly being used for scheduling, revenue management, guest communications and operational efficiency. Walker & Dunlop
But there is a catch: hotel technology remains highly fragmented. One 2026 operations survey found only 11% of respondents considered their technology stack fully integrated, while 91% still relied on some manual reporting. HSMAI Asia
So the challenge isn’t simply “get more technology.”
It’s “get technology that actually reduces workload and improves decision-making.”
- Rising guest expectations
Guests increasingly expect:
– Personalisation
– Immediate responses
– Digital convenience
– Consistent service
– Recognition
– Seamless check-in/check-out
– Great experiences across every touchpoint
And they compare hotels not just with other hotels, but with the best digital experiences they’ve had anywhere.
- Competition and differentiation
Hotels are competing against:
– Other hotels
– Serviced apartments
– Short-term rentals
– New lifestyle brands
– Boutique properties
– Alternative accommodation
In the 2026 Wyndham hotel-owner survey, 34% identified rising competition as one of their top three obstacles. Hospitality Inside
The challenge therefore becomes:
Why should a guest choose us, and why should a good employee choose to stay with us?
- AI and digital transformation
AI presents both an opportunity and a challenge.
Hotels need to work out:
– Where AI genuinely adds value
– How to integrate it with existing systems
– How to use data effectively
– How to automate without destroying the human element of hospitality
– How to justify the investment
PwC notes that AI is already changing how travellers compare and book hotels, with 44% of consumers surveyed using AI tools to compare prices. PwC
- Cybersecurity and data protection
Hotels hold enormous amounts of sensitive information such as payment details, passports, addresses, booking information and loyalty data.
As hotels become more digitally connected, cybersecurity becomes increasingly important.
33% of hotel owners in the Wyndham survey ranked cybersecurity threats among their top three obstacles. Hospitality Inside
- Supply, development and ageing assets
In Australia, there’s an interesting contradiction: demand is strong, but new hotel supply is constrained by construction costs, financing and feasibility.
CBRE says Australia’s hotel performance remains strong while development constraints are limiting future supply. CBRE Australia
That puts additional pressure on existing properties to maximise the performance of the assets and people they already have.
And there is a very strong connection between all these challenges:
Retention → workload → engagement → discretionary effort → guest experience → reputation → revenue → profitability.
The compelling hotel conversation is:
“How much is staff turnover, burnout and disengagement costing your hotel, and what would improving retention and discretionary effort do to your guest experience and bottom line?”
