Russell Kett, chairman of the hospitality board, HVS London, describes seven changes the UK hotel industry cannot afford to ignore as 2022 approaches.
The past 18 months have been an unprecedented time for hotels. To survive, companies must embrace change throughout their operations and do it quickly.
1. Dependence on technology
The pandemic has made technology take a bigger role in our daily lives and hotels now need to reflect that, and even lead the way in using smart technology, as many customers will now demand it across the board. of their life.
Why not try smart rooms, digital receptions, keyless room entry, smart payment, and smart check-in and check-out?
2. A new dawn in business travel
While face-to-face meetings remain the gold standard, online communication offers a cheaper and faster alternative way to meet.
Travelers will need to find ways to make business travel more efficient, perhaps combining it with an element of leisure, as companies continue to impose tighter financial controls on travel expenses.
Hotels with high exposure to MICE activity should seek to offer facilities that support and enhance this, whether these are spaces for smaller meetings, encouraging locals to join work centers, or ” provide spaces for online meetings with appropriate background, lighting, seating and food and drink.
3. A greater diversity of financial lenders
As the market recovers, there will likely be an increase in refinances, restructurings and divestitures. Debt funds are expected to become the most active lenders, although traditional lenders are likely to return once hotel cash flow improves.
Funding is expected to become more diversified, however, as credit funds and other alternative lenders tolerate a higher degree of risk, albeit at a higher cost to the borrower.
4. Transactions falter before recovery
There is still a huge weight of capital looking to invest in hotels. While the availability of distressed acquisition opportunities is likely to be significantly lower than expected at the start of the pandemic, this will support the recovery in asset values as well as the fact that owners looking to sell will hang on for. benefit from a price recovery.
The improving outlook and a growing number of troubled sales as loans are refinanced should ensure hotel transactions become considerably busier as 2022 progresses.
5. Reduction of the wage bill
Data from the Office for National Statistics puts the staffing shortage in the hospitality industry at around 10% of capacity. This is because staff on leave have found work elsewhere and changes in visa requirements, which have prompted more than 90,000 European workers to leave the industry since Brexit.
As a result, some hotels have reduced their trading hours or days, discontinued lunch or afternoon tea service, closed gyms or health spas.
In the longer term, hotels have to operate with fewer staff, aided by greater use of technology. Some of the brand standards of hotel companies that were cut during the pandemic may need to stay in place for the longer term, and other changes may need to be considered to reflect the new normal.
6. No more outsourcing
Hotels have often outsourced services such as cleaning, housekeeping, maintenance and security, but staff shortages are now prompting new areas to be outsourced as well, such as food preparation and service. in room.
Restricted menus and easier to assemble dishes, as well as improvements in deliveries, now make it possible to work more efficiently and economically.
This is not possible for upscale restaurants, but when the food supply is a complement and menus are appropriate, some degree of food preparation can be supplemented offsite with a number of new ‘darker kitchens. “. Some hoteliers who have space available might consider renting some of these spaces to operators of such kitchens.
7. Durability cannot be ignored
There is no doubt that corporate sustainability has become a pressing issue. Lenders and investors are now looking at a company’s environmental credentials and increasingly limiting their exposure or refusing to get involved with those without an active or compelling ESG policy.
This problem can no longer be ignored. The hotel industry, in general, is very late for this party and must act responsibly, decisively and quickly.