It's official—the recession is over, apparently as of June 2009. And yes, I do believe the hospitality industry is no exception and is headed towards recovery, despite all the talk of a double-dip recession. Though we’ve witnessed somewhat of a slowdown, consumer confidence seems to be on the rise, the overall stock market may be improving from where it was at the beginning of last year, and business travel is experiencing a modest uptick. We need to take a more positive outlook as the industry continues to show modest signs of growth, which I believe will continue for the remainder of this year and into 2011.
The question is, after last year’s sharply curtailed consumer and business spending, what trends and challenges will shape the future of hospitality and offer new opportunities? As hospitality businesses start seeing more improvements in their bottom lines, among the areas they should focus on heading into the upturn are:
1. Quality and Value:
Consumers are emerging from the recession more value-focused than ever. Hotels can boost their offering by adding value through “packaging,” whether it’s throwing in free internet access, a free night stay, access to additional amenities, extra points or complimentary breakfast. Additionally, with all the cutbacks, customer service levels were perceived to be lacking during the recession. Hospitality companies should refocus on creating positive customer experiences, and providing the complimentary services that add up to a big difference, such as offering cold towels poolside and complimentary drinks upon arrival.
Spending on technology in the hotel industry still lags behind other sectors, but now is the time to catch up. The importance of technological development will continue to grow for hospitality companies, with the key areas being online booking and mobile technology, CRM, smart cards and social networking. Additionally, with credit card theft and fraud occurring more frequently in the hospitality industry than other industries, businesses need to take a close look at cyber theft and identity management issues created by vulnerable security networks and identify appropriate solutions to tackle the problem head on.
3. New Challenges:
With the recession now behind us, hospitality businesses should prepare to face new obstacles. The next big challenge is healthcare reform, with provisions that took effect on September 23. The hotel sector will be impacted significantly by new requirements of the healthcare reform law due to the vast amount of part-time and seasonal workers, as well as the scale of labor costs within a hotel’s cost structure. Employers that start to address and understand the implications of health care reform now can develop an advantage in managing change and employee expectations, and in planning for the associated costs.
Pulling into the 4th quarter, hotel industry leaders who break out of survival mode and develop more strategic, long-term plans to address new industry shaping trends have the potential to be the true game-changers. The time has come to prepare for a brighter, bullish future.