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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.
Lagos State has dragged 45 individuals and firms, including Bi-Courtney Aviation, DAAR Communications and Leaders & Company, to revenue court for tax debts running into billions of naira.
Lagos Govt
Bi-Courtney, operators of Murtala Muhammed Airport Terminal Two, faces N38.7 million claim; DAAR, behind Africa Independent Television, owes N22.4 million; ThisDay publishers Leaders & Company allegedly skip N67.1 million.
GMT Energy Resources tops corporates at N145.8 million, followed by Sheriff Deputies at N132.1 million; others like Heyden Petroleum, AA Rescue, BRT operator Primero also listed.
Individuals owe N13.5 million to N35 million each.
Attorney-General Lawal Pedro said suits followed ignored notices, aiming to enforce laws and fund infrastructure.
More defendants: IENG Nigeria, James Fisher, V Care Diagnostics, Venture Garden, Saro Africa, Barry Callebaut, Native Media, First Consulting, Eyowo Payments.
Compliant taxpayers post-notice escaped prosecution; defaulters risk penalties, interest, jail.
Pedro urged prompt filings and payments.
National Agency for Food and Drug Administration and Control (NAFDAC) has alerted Nigerians on counterfeit and unregistered Cerelac Mixed Fruits and Wheat products being sold in Lagos.
NAFDAC said Nestle Nigeria, the genuine Marketing Authorisation Holder of the product, received a complaint of suspected counterfeit purportedly manufactured by Nestlé Spain, bearing Batch Code 308002910.
It said that Nestle Nigeria reported that the complainant described that the counterfeit product emitted an odour suggestive of possible contact with fuel.
NAFDAC said that preliminary review of the product by Nestle Nigeria indicated that it had expired, in spite of the container displaying an expiry date of 10-2026, which suggested that the date coding had been tampered with (revalidated).
Nestle Cerelac Mixed Fruits and Wheat is a nutritious infant cereal, designed to be a delicious first food for infants.
NAFDAC said that its post-marketing surveillance’s directorate officers in Lagos conducted a surveillance visit to Maxland Shopping Centre, 193 Ago Palace, Okota, where the product was purchased by the complainant.
It added that the suspected counterfeit and unregistered Cerelac were found on sale at the premises and subsequently mopped up, while Nestle assisted in identifying the distinguishing features between registered and unregistered product.
According to the regulatory agency, Nestle revealed that the unregistered product used a hyphen (-) to separate the day from the year, while the registered product used a slash (/) to separate the day from the year.
“It is important to note that Nestle Nigeria is not aware of the channels through which the products are supplied into the country.
“Healthcare professionals and consumers are advised to report any suspicion of the sale of substandard and falsified regulated products to the nearest NAFDAC office, call 0800-162-3322, or send an email to [email protected],” NAFDAC said.
The agency warned that counterfeit formula often lacked essential nutrients, vitamins and minerals, leading to stunted growth or developmental issues.
It said that such formula might also contain contaminants that might lead to severe health consequences to infants or even death.
NAFDAC reiterated its commitment to safeguarding public health adding that it would continue surveillance activities to ensure the quality, safety, and efficacy of all NAFDAC-regulated products circulating in Nigeria.
It said that all zonal directors of the agency and state coordinators had been directed to carry out surveillance and mop up the revalidated product, if found within the zones and states.
The agency urged distributors, retailers, healthcare professionals, and caregivers to exercise caution and vigilance within the supply chain, to avoid the distribution, sale, and use of fake products.
The National Information Technology Development Agency (NITDA) has reinforced its commitment to advancing Nigeria’s digital transformation agenda through strengthened collaboration with key strategic institutions, as it hosted the Director General of the National Institute for Policy and Strategic Studies (NIPSS), Professor Ayo Omotayo, alongside participants of the Senior Executive Course (SEC) 48, 2026.
The visit, which builds on an earlier strategic study tour, provided a platform for in-depth engagement on the role of digital innovation in driving sustainable economic growth, with particular focus on the Orange Economy.
Representing the Director General of NITDA, Kashifu Inuwa CCIE, the Director of Stakeholder Management and Partnerships, Dr Aristotle Onumo, highlighted the Agency’s commitment to fostering a vibrant digital ecosystem through inclusive policies, strategic partnerships, and capacity development initiatives.
“NITDA is committed to creating an enabling environment where innovation can thrive by bringing together government, private sector, academia, and creatives to drive Nigeria’s digital economy,” he stated.
Inuwa underscored the growing importance of the Orange Economy, describing it as a critical driver of innovation and economic value through intellectual property. He identified sectors such as digital content creation, film, animation, and digital art as key contributors to national development.
“The Orange Economy represents a powerful opportunity to transform our rich cultural heritage and creativity into sustainable economic growth,” he noted.
He further highlighted Nigeria’s unique advantage, particularly its youthful and creative population, while calling for stronger collaboration among stakeholders to fully harness the sector’s potential.
“With our youthful population and rich cultural assets, Nigeria is well-positioned to become a global leader in the Orange Economy if we deepen collaboration and investment across the ecosystem,” he added.
During the engagement, NITDA also presented its strategic initiatives aimed at supporting the digital and creative sectors, including digital infrastructure development, promotion of digital literacy, and implementation of policies that enable startups and innovators to scale.
Addressing challenges facing the sector, Inuwa pointed to issues such as limited access to funding, infrastructure gaps, weak intellectual property protection, and ecosystem fragmentation, while emphasising the need for coordinated action.
“Addressing challenges such as funding gaps, infrastructure deficits, and intellectual property protection is critical to unlocking the full potential of Nigeria’s creative economy,” he said.
The Agency reiterated its target of achieving 70 per cent digital literacy by 2027, noting that ongoing programmes are equipping millions of Nigerians with essential digital skills, including those in underserved and informal sectors.
In his remark, Professor Omotayo described the visit as an important opportunity to deepen understanding of how digital technologies are reshaping economic sectors, particularly the creative industry. He noted that the insights gathered would contribute significantly to policy recommendations aimed at strengthening Nigeria’s economic framework.
Participants of the SEC 48 programme engaged actively during the session, raising questions on capacity development, access to tools, and frameworks for protecting digital content. NITDA highlighted its ongoing collaborations with industry stakeholders to provide training, innovation hubs, and access to digital tools for young Nigerians.
The engagement concluded with a renewed commitment from both NITDA and NIPSS to strengthen collaboration in research, policy development, and capacity building, aimed at positioning Nigeria as a globally competitive force in the digital and creative economy.
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