In most countries, the hospitality industry is considered an important sector of the economy. The sector creates wealth and generates significant revenue for the national GDP (Aquapark, 1 October 2013). The company also tends to employ thousands and thousands of people who derive their daily bread from the industry. Despite these advantages, the hospitality sector is characterized by high risks of losing its potential. In New Zealand, the sector is characterized by variable incomes and high fixed costs. In some countries around the world, the competitiveness bar is raised high due to the concentrated proximity of the most beautiful and attractive destinations. In such an environment, declining industry advantage tends to have a detrimental effect on the national economy. The industry is characterized by some significant challenges which are discussed below. A significant challenge facing the hospitality industry is leadership. Leadership is the key to the success or failure of any department, office, or industry (Anonymous, 2011). It affects hospitality management in the industry. Although management and leadership are used interchangeably, they are not the same thing. It is a significant quality for the success of the hospitality industry. Many industry employees are not leaders, compromising their effectiveness in the marketplace. The lack of quality leadership is putting the hospitality industry on a decline towards collapse. To curb this phenomenon, most hiring managers look for candidates who demonstrate the ability to transition from one role to another based on the needs of the environment (Chung-Herrera, 2003). Another big challenge in the hospitality industry is guest profiling. This is the ability to collect and use g...... middle of paper ...... in education.International Hospitality Management Journal of Contemporary 13.6, 310-315.Morrison, A. (1999). The future of small businesses in the hospitality industry. StrategicContemporary Hospitality Management Journal 11.4, 148-154.Olsen, M. a. (1998). strategic management Research in the hospitality industry. International Journal of Hospitality Management 17.2, 111-124.Porter, M.E. (1986). Competition in global industries. Havard: Harvard Business Press.Rimmington, M. (1999). Professional training: The challenges of hospitality management. International Contemporary Hospitality Management Journal 11.4, 186-192. Synerion, W. (Editor). (September 11, 2013). Labor management challenges in the hospitality industry [moving image]. Wang, J.-Z. (2012). Issues, trends and challenges facing the hospitality industry. NY: Association of Human Resources Managers .