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Jovago.com Identifies 10 Costly Mistakes Hotel Owners Make
Hotel owners often make some basic mistakes when operating their hotels and then cannot understand why they either make no money or the hotel eventually closes down – below are just some general mistakes but these are not the only ones owners can make.
First there is the tendency to base room rates only on what competitors are doing instead of what is actually offered to the guest in relation to what it costs the hotel.
There has to be a balance between perceived value and the guests paying a fair value for what they are getting. Should a guest feel cheated the guest will never return.
It is very rare for a hotel to be premium in its reputation and location for it to charge what it wants.
Thus stated, where a hotel has no clear rate policy that dictates what the standard room type rates are and what is discounted to companies, groups or frequent guests can be costly for an owner.
Quoting on an individual negotiated basis can lead to mistakes. Some clients may abuse the discounts they are used to and if a hotel refuses to honour what they did before the guest may actually go elsewhere.
Though guest loyalty is a fallacy, if guests know how the hotel’s policy works and they know what to expect, they can actually become regulars and trust that for what they are paying for is fair in relation to what they are getting.
Such a rate policy is usually an internal document not shared with guests but highlights what the normal rates are and what a guest is offered for what they pay. Furthermore, it would also specify what discounted rate they would get based on a justification such as they are actually a group or a regular company or a regular guest. The guest is given the full rate and then the rate offered that best describes the qualification for such a discounted rate. No percentages should beused but rather the value of the discounted rates.
Writing on the mistakes hotelers make often times, Bruce Prins, notes that Hotels that misrepresent themselves as luxury or budget when in fact they are the opposite can alienate guests and cause the business to fail.
Services and facilities determine a hotel’s grading and status as either to be budget, economy, mid-scale, up-scale or luxury.
It is important for the owner to get professional advice on what grade their hotel is before making claims and deciding what rates to charge for their hotel rooms.
The practice of not doing preventative maintenance by checking all furniture, fittings and equipment daily or weekly and then using cheap labour or skills to conduct maintenance is destructive for a hotel.
The worst is when the hotel just plainly expects guests to stay in ahotel with paint peeling of walls, leakages everywhere and furniture and equipment either broken or not working at all.
A guest will realise they are being taken for a fool and move elsewhere. If it is a cheap hotel that chargescheap rates then this will attract guests that will go further to add to the deterioration of the hotel as an asset and its reputation.
Hotels that then add gimmicks to compensate for poor service, exorbitant rates or poorly maintained facilities, do so as a cheap attempt at making the guest feel that they are getting value for their money.
Gimmicks can be extra services, furniture or equipment added that actually do not really add value to the guest.
An example would be to place chocolates on the pillows at night time in a hotel where the air-conditioning does not even work. Hotels have to get the basics right such as cleanliness, hygiene, good service and working equipment before even attempting to add little touches to entice or appease guests.
Hotels do get old and money should be invested at least every five or ten years to ensurethe hotel is kept up to standard. That is if the hotel was properly thought out and built to begin with.
If no money hasbeen allocated for it or no investment is forthcoming, the hotel will lose out to its competitors and eventually go bankrupt.
In today’s world where competition is forever increasing no hotelier can afford to sitback and think the guest will just take it or leave it.
Owners that withdraw profits from the business on a continuous basis, especially during the first few years and then take loans when serious funds are needed are setting the hotel up for a disaster and wasting their money.
Profits should be kept in the business until all loans are paid and then these same profits should be used to either pay out as dividends or form part of future re-investment.
A hotel is a business but most of all its value is in its appreciation over time into an asset that can be sold at a high value, especially if it is successful and has a good brand name.
At least the building and land can be sold as is at a greater value when need be because property most of the time increases more in value than cash in the bank.
If staff in a hotel are exploited by either being paid far below what the average salary would be for their work, or not being given training or even being replaced at a whim without clear disciplinary policies applied consistently, it is a given that the hotel will lose business.
Staff would steal and in actual fact contribute to the hotel’s deterioration with a mediocre and apathetic attitude to their work, each other and the hotel guests.
It is common for anhotelier to also think that when the hotel pays to have people trained they will leave for better jobs. That may be so but then the question begs as to why the staff would be so eager to leave.
The fact that staff do leave hotels or move around is a normal situation in hotels world-wide and yet a lot of hotels that actually encourage staff turnover in a positive way find that they have better occupancies, happier customers and more profits.
The trick is to keep the staff that add the most value and show the most potential in ensuring the hotel is a success.
Lastly a hotel owner should be careful of who they encourage and even allow to stay in their hotel. When prostitutes are consciously allowed to operate in or from a hotel they draw in bad elements such as criminals and drug users.
Drug users or criminals then encourage kingpins to also frequent and then attract murderers and even entire gangs to take up residence.
Once the latter occurs the owner has no more control over his or her hotel and I subservient to the abuse and whims of the clandestine community he helps create within his or her own hotel.
Bismarck Rewane, renowned economist and chief executive officer of the Financial Derivatives Company, has warned that the recent outbreak of the tomato leaf miner, commonly referred to as “Tomato Ebola,” is a disruption to Nigeria’s agriculture value chain.
Bismarck Rewane, CEO, Financial Derivatives Company
Speaking on Channels Television’s Business Morning programme on Thursday, Rewane emphasised that the impact of the outbreak extends far beyond tomatoes, triggering a cost ripple effect across the broader food basket.
“The effect of an increase in the price of tomatoes leads to cost elasticity which means that the price of other substitutes will begin to increase, including the price of carrots, the price of tomato paste, price of tomato puree and other things.
“One for the reddening, two for the effect and the thickening on the sauce you’re making.
“However, because tomato is a perishable commodity, it also means that if there is tomato ebola, then the price has increased, and also the supply has reduced, it has a knock-on effect on so many other things,” Rewane explained.
He added that Nigeria’s lack of food storage and preventive mechanisms has worsened the crisis, causing severe supply chain disruptions.
Rewane’s comments come amid a sharp increase in the price of tomatoes, with a 50-kilogramme basket of the commodity which used to sell for N5,000, now selling for N10,000 to N30,000, thereby compounding food inflation and straining household budget.
The Federal Government said Nigeria has so far lost over N1.3 billion to the outbreak of the invasive pest in key tomato-producing states like Kano, Katsina, and Kaduna.
Abubakar Kyari, minister of Agriculture and Food Security, explained that the outbreak has significantly disrupted tomato supply chains, causing a surge in prices.
He noted that the outbreak of tomato Ebola highlights the fragile nature of Nigeria’s horticultural systems, and that the invasive pest can destroy tomato crops within 48 hours, resulting in catastrophic yield losses.
He added that this crisis highlights the urgent need for integrated pest management strategies, investment in resilient crop varieties, and enhanced support for farmers to safeguard the country’s food supply chains.
A Federal High Court sitting in Lagos has adjourned the N12.3 billion loan controversy case involving the Chairman of Honeywell Group, Oba Otudeko, and three others, to June 11, 2025.
Oba Otudeko,
Justice Chukwujekwu Aneke postponed the case to allow time for either a peaceful settlement or the formal arraignment of the suspects.
The decision followed reports that negotiation are still ongoing between the parties involved for out-of-court settlement as advised by the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), who is trying to mediate.
During Thursday’s hearing, Otudeko’s lawyer, Bode Olanipekun (SAN), told the court that negotiations for an out-of-court resolution were still in progress.
Similarly, the lawyer for the Economic and Financial Crimes Commission (EFCC), Bilikisu Buhari, acknowledged the discussions but asked the court to set a new date for arraignment in case the negotiations fail.
It will be recalled that at the last sitting of the court on March 17, Chief Wole Olanipekun (SAN) had informed the judge that a meeting involving all counsel had been convened at the instance of the Attorney General of the Federation.
He said that this was aimed at reaching a peaceful settlement of the case.
Olanipekun had also stated that substantial progress was made, and the AGF directed all parties to refrain from actions that could jeopardize the resolution process, including filing further applications.
The court will reconvene on June 11 to hear the outcome of the settlement talks or proceed with the arraignment if no agreement is reached.
The Zamfara State government has signed an agreement with Oracle to invest in youth development, workforce capacity building and the digital economy under Oracle University’s Skills Development Initiative (SDI).
The agreement was signed at Oracle’s Offices in London, United Kingdom, with Governor Dauda Lawal representing the Zamfara State government.
A statement on Wednesday by the Governor’s spokesperson, Sulaiman Bala Idris, explained that the development will foster collaboration between the Zamfara Information and Technology Development Agency (ZITDA) and Oracle.
Secretary to the State Government, two Special Advisers and the Executive Secretary of ZITDA were also present at the event, along with Siobhan Wilson, Oracle UK Country Leader and Senior Vice President, EMEA.
The statement said, “Zamfara State government has signed a strategic agreement with Oracle to drive digital skills development across the state.
“Facilitated through the Zamfara Information Technology Development Agency, the collaboration will use the expertise and learning services of both Oracle Academy and Oracle University in their digital transformation efforts.
“The collaboration signifies a commitment to education and a strategic investment in the future of Zamfara’s youth, workforce and digital economy.
“Oracle Academy, Oracle’s global philanthropic educational programme offers a robust portfolio of technology education teaching and learning resources, including curriculum and software access, to educators and students worldwide.
“With the support of the Zamfara Information Technology Development Agency, these resources will be made available to validate higher education institutions across Zamfara.
“ZITDA will help lead efforts to integrate Oracle Academy offerings into Zamfara’s higher education curriculum, equipping educators with the tools and resources they need to guide students in learning hands-on tech skills and toward Oracle’s professional certifications and foster a new generation of tech-savvy leaders.
“In addition, Oracle University’s Skills Development Initiative, a global programme that provides access to world-class learning and certification programmes at no cost to eligible learners, will further expand opportunities for learners in Zamfara.
“Through a co-branded Learning Portal in collaboration with ZITDA, Oracle University plans to provide free access to digital learning paths and foundational certifications for eligible participants across Zamfara. This includes curated learning journeys offering over 200 hours of professional-level training in high-demand areas such as Cloud, AI, Data Science and APEX development.”
In his remarks at the ceremony, Governor Dauda Lawal restated that the collaboration with Oracle is part of his administration’s commitment to transforming Zamfara into a hub of innovation, education, and digital excellence.
He said, “on behalf of the government and the good people of Zamfara State, I extend my deepest appreciation to Oracle for believing in our vision and for partnering with us on this transformative journey.
“What we are doing today goes beyond technology, it is about giving hope, creating opportunities and unlocking the future. By investing in digital education and innovation, we are offering real alternatives to poverty, to joblessness and to despair. I sincerely thank Oracle for standing with us, believing in the power of partnership, purpose, and shared dreams.
“Today, we are not just signing a document, we are making a promise, promise that every child in Zamfara will have a fair chance to dream, to learn, and to succeed. A promise that technology will be our bridge to a stronger, more inclusive economy. And, a promise that Zamfara will not merely participate in the digital revolution, we will lead it.”
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