The hospitality industry is renowned for being highly competitive, dominated by several established brands. For start-ups to gain a secure footing in it, they need to differentiate themselves, creating ﬁrm foundations, future-proof strategies and innovative value propositions. This will enable them to tap into emerging global travel trends. However, in the ﬁrst instance, there are several common hurdles to overcome. These include:
Access to capital
Securing funding is a signiﬁcant challenge for many new ventures. Competition for investment can be ﬁerce and raising sufficient capital to sustain and grow a business can feel like a constant struggle. New ventures should dedicate ample time and resources to the process, creating a solid investment deck that clearly expresses what they do and how they plan to innovate the industry, while leveraging their network for access to key investors.
Alongside navigating obligatory regulation and compliance requirements, understanding tourism, travel and other government-related policies is instrumental to success, whether that’s building codes for green construction or food safety for food tech. Scrutinizing government initiatives and national economic roadmaps, and aligning start-up plans with them is a wise course of action.
Start-ups often begin by focusing heavily on product development and sales, and leave it later than they should to implement their marketing and communication plans. An early focus in this area is essential, however, establishing precise positioning and messaging to clearly convey the business’s purpose, product and vision, articulating exactly what it does and offers, and how it differs from the competition.
As a start-up grows, it can be difficult to scale operations efficiently while maintaining quality. Many new ventures grow too quickly without having a solid foundation and growth strategy in place. To address the future challenges of limited resources, talent acquisition, infrastructure, quality, operational efficiency and market changes, start-ups should invest in scalable technologies and processes, seek outside funding and expertise when necessary, and continuously adapt to changing circumstances. Flexibility, resilience and a proactive approach to problem-solving are key aspects in overcoming scalability issues.
On the positive side, there are several emerging global travel trends that new ventures could consider exploring:
This industry segment is gaining momentum, driven forward by today’s environmentally conscious traveler who prefers responsible hotels and businesses. New generations of travelers are attaching increasing importance to environmental, social and governance (ESG) principles when making their plans, and, in tandem, governments are more likely to incentivize sustainable practices. As a result, this sphere offers huge potential for hospitality start-ups.
Travelers’ preferences have shifted, with unique and experiential travel expanding to become a dominant industry category. Consumers are seeking authenticity, personalized experiences, unique accommodation concepts, community involvement and exclusivity. To cater to these changing demands, businesses need to have a strong focus on the guest experience from the outset. Success in this segment will depend on a venture’s ability to provide customization and build loyalty.
Rising demand for digital solutions has handed technology an essential role in the industry. Mobile apps and digital platforms are increasingly being used to streamline bookings, personalize services and handle contactless interactions. AI is rapidly becoming an integral part of operations and next-generation technology will be a prerequisite for success. New businesses need to invest in tech that not only fulﬁlls immediate needs but has built-in options for future innovation and enhancement on a scalable level.
To help them achieve success in a competitive market, hospitality start-ups need to monitor industry trends, but also be agile, innovative and respond quickly to change. Conducting market research, liaising with industry associations and seeking advice from experts in their ﬁeld will help business leaders to make informed decisions and carve out a sound path for the future.