The cost of improvising: what happens when a hotel boom attracts people who cannot run a hotel
The Italian accommodation market is going through one of its best seasons in a decade. Investment in hotel real estate passed two and a half billion euros in 2025, up by almost a third on the previous year and at its highest level since the start of the decade, while the non-hotel segment is growing faster still and tourism is hitting record numbers of guest nights. It is a climate that attracts capital and new operators, many of whom come from other trades, convinced that running a hotel is fundamentally a matter of common sense and hospitality.
A favourable cycle, however, does something insidious: it hides the difference between a hotel that is well run and a hotel that is merely full. When the market is strong, even an improvised operation fills its rooms. The trouble starts afterwards, and it concerns everything happening behind that façade of fullness. Because running a hotel, whatever it looks like from outside, is one of the most complex business activities that exists at small scale — and improvisation, sooner or later, presents its bill.
Not one trade, but ten at once
Anyone looking at a hotel from the outside sees a building, some rooms, some staff on reception. Anyone running one knows that behind it lies a web of activities that all have to be held together at the same moment, each with its own logic and its own specialist skill. There is revenue management, meaning the construction of prices as a function of demand, which has nothing to do with charging more in high season. There is cost control, which means knowing at any moment where margin is generated and where it is burned, and distinguishing growing turnover from a thinning profit. There is distribution, with the simultaneous management of the direct website, the OTAs and other intermediaries, each with different costs, dynamics and constraints. And then there is staff management, planned maintenance, purchasing, operating standards, online reputation, and regulatory and tax compliance.
The difficulty is not in any single task, but in the fact that these fronts are interconnected: a department that jams drags the others down with it, a figure entered wrongly in the PMS distorts every decision downstream, a neglected review erodes the demand that revenue management could have capitalised on. Trade associations and the sector’s trainers say it without mincing words: hotel management cannot be improvised, because it demands method, measurement and the ability to read flows. Anyone who thinks it is enough to “keep on top of the property” has not yet grasped the complexity of what is in front of them. And it is precisely this submerged complexity — invisible while everything runs smoothly, glaring the moment something breaks — that makes the sector so deceptive for those entering it unprepared.
What breaks when you are not ready
The problems of an unprepared operation rarely blow up all at once. They surface slowly, and the first signal is almost always the same: a hotel that is full but makes little margin. Occupancy is good, the property is always busy, and yet at the end of the financial year the numbers do not add up as they should. It happens because prices are moved reactively rather than strategically, because dependence on the OTAs erodes a slice of revenue on every booking, because decisions get taken on feel instead of on figures. You work enormously hard and earn little, without managing to work out where the money goes.
Around this core sit all the other symptoms that observers of the sector describe with regularity: improvised leadership, departments organised loosely, difficulty retaining staff, and a turnover rate that costs both training and continuity. Often there is a PMS, but it is used so carelessly that it produces unreliable reports; online reputation is monitored on instinct; maintenance is deferred until it becomes an emergency. Each individual gap looks manageable taken on its own, but their sum describes a property that is misfiring without anyone being able to pinpoint exactly where to intervene.
Being unprepared, moreover, makes itself felt before opening day. Someone who cannot read a hotel business tends, at the point of purchase or of taking over the lease, to pay for what they are told rather than for what can be demonstrated, valuing the property on its promised potential rather than on its real numbers. But potential is not value already acquired: it is value still to be built, and building it requires precisely the skills that are missing. So the initial mistake and the daily difficulties end up feeding one another.
Software and consultants do not run it for you
At this point the most reasonable objection arises: is a good property management system, or a good consultant, not enough to close the gap? The honest answer is that they help, but only on one condition.
Tools amplify the competence of the person using them; they do not replace it. A PMS fed without rigour produces useless reports, because the limit is almost never the software but the careless way it is used, owing to a shortfall in training further upstream. The same holds for consultancy. A good consultant transfers method and best practice, but can only transfer them to an operator capable of understanding them and willing to change the way they decide. Turning to professionals is useful and often indispensable — it is not in the least a fallback — but it works within a baseline of understanding. Brought in as a shortcut, to delegate a problem you would rather not understand, a consultant becomes a cost with no return. The difference is not having or not having a consultant: it is having or not having the method to make use of one, and to recognise whether what you are being told makes sense.
The bill that arrives late
The most insidious feature of improvisation is that it rarely produces a spectacular, immediate failure. Far more often it produces a quiet erosion: margins thinning season after season, maintenance deferred, reputation slipping, staff leaving. The Italian tourism sector counts around four hundred thousand businesses, of which almost seventy thousand are hotels, with a default rate that credit analyses put at around four per cent — not an alarming figure in absolute terms, but one that points to widespread fragility. And decline, when it shows itself, almost always arrives later than the moment at which it could have been corrected, until the only remaining option is a sale at a price that does not reflect the capital invested.
Conclusions
The hotel boom is a real opportunity, and the capital feeding it is evidence of a sector that has become mature and attractive. But a favourable cycle is not a leveller: it is a filter. It makes visible — and, over time, monetisable — the difference between those who have the skills to govern a hotel’s complexity and those who merely tackle it on instinct. Those who enter prepared find a market that rewards them; those who enter improvising find a market that, more slowly and with less drama than people imagine, presents the bill.
The complexity of hotel management is not a technical detail to be delegated at year end: it is the substance of the trade itself. Taking on a hotel without experience is not, in itself, a mistake — provided you recognise in good time how much competence it really demands and go and acquire it, through study or with the help of those who have it. Doing it lightly, underestimating everything moving behind a full property, is almost always a mistake — and it carries a cost that gets paid later, when putting things right is far harder.
Frequently asked questions
Why is running a hotel so complicated? Because it is not one activity but many interconnected ones to be overseen simultaneously: revenue management, cost control, channel distribution, staff management, online reputation, maintenance, purchasing, operating standards and regulatory compliance. Each demands specific skills, and a problem in one area quickly rebounds onto the others.
Do you need previous experience to run a hotel? Not necessarily direct operational experience, but managerial competence is indispensable — your own, or acquired by bringing in qualified people — across the different areas that make up the job. The real risk is not the absence of experience as such, but underestimating the complexity of the trade and approaching it without method.
Why can a hotel be full and still not profitable? Because occupancy measures how full you are, not your margin. Prices moved reactively, heavy dependence on the OTAs and decisions taken on feel rather than on data mean a heavily occupied property can still generate modest profits. It is the most common signal of an unprepared operation.
Does hiring a consultant solve a lack of competence? Only partly, and on one condition. A consultant transfers method and best practice, but can only do so to an operator capable of understanding them and willing to change how they take decisions. Used as a shortcut to delegate a problem you would rather not understand, consultancy becomes a cost with no return.
What problems arise from an improvised operation? In the most typical order: overpaying to get in on the basis of unproven potential; making little margin despite working hard, because of reactive pricing and dependence on intermediary channels; disorganised departments and high staff turnover; and a progressive erosion of the property’s value which, in the worst cases, leads to a sale on unfavourable terms. It is rarely a sudden collapse: far more often a quiet decline, spotted too late to correct.