The U.S. hotel industry put on a strong performance in 2015, with occupancy, average daily rate, revenue per available room, and other benchmarks hitting all-time highs. Increases in occupancy, in particular, have a profound affect on the industry, especially on hotel operations and housekeeping expenses.
When occupancy increases, hoteliers must also increase employee labor hours. In fact, according to PKF’s 2015 Trends in the Hotel Industry report, operating expenses (ExPAR) rose 4.9 percent for U.S. hotels in 2014, which is the greatest annual increase in ExPAR since 2007. As a result, many hotels must recruit new staff members and boost employee productivity and meet operations demand. And, finding the right people for the job can be challenging. “If we don’t keep, train, and motivate the right staff, this is really the area that can break down the industry,” explains Chris Green, principal and senior vice president of operations at Chesapeake Hospitality, a Greenbelt, Md.-based hotel management company.
According to Green, finding qualified talent is at the forefront of hoteliers’ minds coming into 2016, and many companies are making an effort to cultivate student interest in hospitality careers at an early age. Green has spoken at a number of high schools this year about what it means to be in the hospitality industry at all levels. “It’s a solid strategy for hiring managers and people looking to get a foothold in the industry,” he says.
While finding talent and managing labor are of the utmost importance, other factors will come into play next year that will affect operations. Group meetings and transient business are forecast to increase in 2016. In November 2014, the industry began to see a sharp uptick in bookings for large groups, and this number is only projected to increase in the coming quarters. The challenge will be for hoteliers and their management companies to pay attention to financial trends.
“To maximize our properties’ rate of return and profit lines, we have to be ready to implement new and trending strategies at an ever-quickening pace in order to meet increasing group demand while still managing overall increased occupancy. Staying ahead of these trends will help properties continue to run well in the years to come,” Green says.