Illustration: Hotels on the beach in Tel Aviv (Photo: ShutterStock)
With the end of the summer months and the Christmas vacation: it is possible to officially announce a renewed boom in the tourism industry in the US, Europe and the Middle East, where the level of income for those who were known in this industry before the outbreak of the corona epidemic, according to an extensive study conducted by the global real estate company JLL on transactions and investments in the hotel sector.
The recovery of the hotel industry is also well felt at JLL. Despite the geopolitical and macroeconomic volatility, until October 2022 a record number of hotel transactions were counted, mainly in the USA.
According to the company's data, during 2022 transactions and investments were made in this area worth approximately 57 billion dollars - almost 50% more than the number of transactions registered in 2021.
Along with this, it must be said that the optimism in the tourism and hotel industry is more fragile than ever due to economic crises and demographic changes that are occurring in the world and may affect the industry.
1 out of every 10 workers in the world will be employed in the field of tourism
According to JLL, the uncertainty that characterizes periods of recession alongside the full recovery of demand for vacations, forces hotel owners to prepare a strategy for the correct and proper management of the hotel in order to reduce risks.
According to Gilda Perez-Alvarado, global manager of the company's hotels and hospitality sector, in order to focus on optimizing profitability and reducing operational risks, there are several actions that hotel owners should consider, chief among them the human resources sector.
Thus, with a substantial increase in the demand for accommodation and hotels worldwide, the tourism sector simply cannot keep up.
According to JLL data, at the end of 2021, the number of vacationers in each region increased three to five times the rate at which employment levels increased.
One of the main reasons for this phenomenon is that former hospitality workers left the industry during the Corona crisis for industries that are seen as less exposed to risks.
Illustration: 87% of the hotels stated that they experience a shortage of personnel (Photo: ShutterStock, CGN089)
Accordingly, a survey published in October 2022 by the American Hotel Association reported that 87% of hotels indicated that they were experiencing staffing shortages.
Considering the current state of the world of work, there are no easy or quick solutions to the manpower problem that characterizes the market, but there are several initiatives that hotel owners can implement in order to improve their work strategy, such as: hiring employees without a background in hospitality, investing in automation software, or technology that improves the efficiency of current tasks and the implementation of creative salary or work structures that will attract and retain existing employees.
"Since the biggest expense of a hotel is personnel, hotel and resort owners must invest a lot of effort in retaining employees and offering real value to attract new employees. We predict that next year 1 in 10 people in the workforce worldwide will be involved in tourism," adds Perez-Alvarado .
The high rates charged by the hotels will force them to maintain the same level of service (Photo: ShutterStock, adriaticfoto)
In addition, unlike in other areas, the hotel industry maintained more or less the same pricing level during the corona epidemic.
Thus, when demand recovered and returned faster than expected, many hotels raised rates beyond what they demanded in 2019.
As of September 2022, all tourist regions, with the exception of Asia-Pacific countries, were quoted at prices exceeding those asked at the same time in 2019. Demand in Asia-Pacific was limited to the local market, which has become a bigger challenge for them to charge higher rates.
Raising rates is a simple solution for hotels, especially in light of inflation and economic uncertainty.
However, by charging high rates, the hotel bears a greater responsibility to offer service and product at a level that matches the new price.
Given the staffing issues this industry faces, hoteliers will have to delicately balance the ability to provide an unforgettable experience with the price they choose to charge.
Real estate
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real estate
Hotels