Tourism is one of the main sources of income in many developing countries. The hotel industry, in particular, is a key player in tourism development and employment generation in these countries. However, the development of hotel projects in growing countries can present considerable challenges and challenges.
In this article, we will show you some of the challenges you may face if you wish to start a hotel project in a developing country. We will also tell you how to deal with these challenges.
CHALLENGE 1: POLICIES AND REGULATIONS
Policies and regulations are a key factor affecting the development of hotel projects in countries on the road to development. This is due to ineffective and weak enforcement that leads to investment uncertainty. In addition, permitting and licensing requirements can be complex and lengthy, which can delay the growth of a project.
So, before investing in a hotel project in a developing country, it is important that you research its policies and apply them. You may need the support of local legal experts and consultants to inform you about permits and licenses.
CHALLENGE 2: INFRASTRUCTURE
The other challenge you may face is infrastructure. Generally, in many developing countries, infrastructure is often limited or insufficient for hotel projects. For example, lack of roads, transportation, electricity, potable water and sewage systems can affect access to tourist areas. This will directly affect the performance of a hotel, resort or any other accommodation.
For this challenge, one option would be to work with local governments to improve infrastructure in tourist areas. If you are an investor you can consider financing infrastructure projects in collaboration with the government and other local businesses. This will also depend on whether the location of the proposed project has the tourism potential to cover the entire investment.
CHALLENGE 3: HUMAN RESOURCES
The lack of skilled employees in the hospitality industry is a reality in developing countries. So this is another challenge you may face. In addition, employees often cannot remember the expectations of international tourists, which can affect the quality of service.
Beforehand, investors should consider the task of providing training and professional development to local employees. One interesting option is to establish relationships with educational and professional training institutions in the country. This would encourage the training of professionals in the hospitality industry.
CHALLENGE 4: SUSTAINABILITY AND CULTURE
Sustainability is currently considered one of the main challenges in the development of hotel projects in growing countries. This is due to the lack of technological advances needed to build more environmentally friendly tourist accommodations. It is a challenge to build more hotel establishments and at the same time reduce the carbon footprint. On the other hand, cultural norms must be respected.
In this case, investors should consider promoting environmental and cultural conservation projects in collaboration with local communities.
CHALLENGE 5: FUNDING
Financing is another common challenge in promoting hotel projects in developing countries. This is because investors face difficulties in obtaining loans due to factors such as high interest rates and short repayment schedules. In addition, the means of financing are often traditional banks, many of which have rigid requirements for obtaining access to loans.
To overcome this challenge you could look to international development organizations and private equity. You can also explore alternative financing such as crowdfunding or MARF.
CHALLENGE 6: SECURITY AND POLITICAL STABILITY
Lack of security and political stability are part of the realities in developing countries. This of course is a difficulty, because they are two key factors in the development of hotel projects. Political instability, violence and crime can negatively affect the safety of tourists and, therefore, the success of your hotel project.
Therefore, before making the decision to invest in a developing country, research on security and political stability. One option for this challenge would be to work together with local authorities to implement adequate security measures in the tourist area. In addition to the latter, maintain constant communication with local embassies and consulates.
The development of hotel projects in growing countries can present multiple challenges. If you wish to invest in such a country, you must be prepared to face these challenges and work with local authorities and communities to ensure the success of the project.
If these challenges can be overcome, hotel projects will have a positive impact on the economic and social development of the country. There will be job creation and, therefore, an improvement in the quality of life of the local communities.