Hoteliers are saying “goodbye “and some are saying “good riddance” to 2021, although, for many, 2021 was better than most of 2020.
Budgets and forecasts are complete for the new year and hotels are now implementing business plans, and the road to driving occupancy and rate is underway. Owners are expecting a good return on investment and management companies are managing costs and labor with a focus on ROI.
Hotel industry veterans are strong advocates for promoting careers in hotels to newer employees. This is a huge topic at conferences, and no one tells the story of why working in the hotel business is so wonderful more than those that do. We know that shining a light on hotel jobs will help attract quality talent.
The key question right now is: What changes are we making for the long term and what have we learned in the last 2 years? Most importantly, what are we going to do with this crash course of hospitality-global-pandemic-education in 2022 and beyond? Which operational practices were deployed only because of Covid and which ones are here to stay, likely only accelerated because of Covid?
“Brands have created excellent standards, and many have been out of the box innovators in the last two years, giving hotels new and improved options in F&B, OS&E and technology. Personalization, unique guest experiences, tech, healthy F&B options and sustainability are the key drivers for hoteliers today mostly because that’s what guests want”, says Jill Dean Rigsbee, CEO of iDEAL Hospitality Partners. “It’s fantastic how far our industry has come in innovation, which has been the silver lining the global pandemic. At the core our of our business, hotels are just big pieces of real estate with many bedrooms, meeting space, F&B and amenities that give guests a place to stay away from home. Think about that simple concept for a moment. Now, put yourself in the shoes of designers, owners, management companies, brands, and guests. How do you make this simple shell of a commercial building the place where travelers want to come to the most, especially in the most challenging times?”, says Rigsbee. “That’s the driving question we ask every day at iDEAL and we hope to find some very cool answers and offer them to hotels”.
So, what is the hospitality market planning for 2022 and years ahead?
Here are four focused categories all hotel market segments are concentrating on now:
Cost Savings and ROI
ROI is king. Return on investment calculations can be easy, but some math on return benefits can be complex. It’s important to have a traditional P&L and perhaps a separate one that can measure those not-so-easy ROI products or services. Rigsbee says, “For example, who remembers when coffee makers were introduced to the industry? Manufacturers were giving the coffee maker for ‘free’ if you purchased their coffee. Sounded good, right? The cost of the coffee was outrageous, and that ended up in the Room Ops budget as a cost item. Where did the “free” coffee maker go on the P&L? Who knows? We finally learned…coffee was not an amenity any longer, it became a standard. Guests expect to have their in-room coffee, and if your hotel did not offer it, they often chose to stay somewhere else that did. After all, do travelers (especially women) want to get dressed and go to the lobby to get coffee before they get fully ready to start their day? Not really. If hotel lost a reservation because they didn’t offer coffee, how did they know about the loss and do their breakeven exercise and then post it on the P&L? It was a complex calculation, but we figured it out because guest demand was high.”
In short, some ROI calculations are easy. Some are not so straight-forward. Supplier partners can help hotels to understand how to measure non-traditional ROI such as market positioning, potential revenue loss, and meeting guests needs and wants. Perhaps increasing room rates to cover a cost is in order, and sometimes it’s not.
Problem Solving Technology
Hotels are painfully aware of the supply chain issues and the labor challenges – which can mostly be out of the operator’s control. GM’s and staff are laser focused on improving efficiencies and the bottom line by concentrating on things they can control to get a strong ROI.
Innovative technology that solves problems is often the answer to taking control and giving hotels the boost of help they need.
Hotels and brands everywhere are also focused on guest perceptions of “clean”, like air purification and surface/key card science that deters germs and bacteria. Robots are delivering room service and retail items to rooms, which guests love and solves labor issues. Noise technology is asking guests to “please be quiet” so that the guest room neighbor is not upset and writes a bad google review, and the night auditor doesn’t have to leave the desk to knock on a door.
Jill Rigsbee says, “At iDEAL, we hear from every management company, hotel, owner and brand we talk to, three key topics are on their mind– 1. Technology that solves problems 2. Solutions related to labor shortages 3. Focus on guests’ health and wellness.” She says, “there are so much wonderful tech options that solve many problems and hotels are thrilled to learn about them from us”.
Sustainability & Wellness
If you look at most hotel brands today, you’ll see missions and visions about two words – sustainability and wellness.
The mere definition of sustainability has evolved and pivoted – also two of the most used words in the last two years. What is means to be green today vs. 10 years ago is quite a different meaning.
There are so many options in the marketplace that makes being green and health-minded easier than ever before. And, by the way, healthy isn’t just physical any longer – mental health is also top of mind for hotels and travelers.
Options available to hotels to be a recognized as a leader in wellness and sustainability are more robust today than in the past years and cross over into all departments. In Food and Beverage, for example, state legislation is going into effect in many areas of the country to ensure discarded food is liquified and going down the drain rather than the landfill. Rigsbee comments, “Food waste digesters, like Orca, use technology and cold water to solve this problem for hotels. It’s amazing how much money hotels save in hauling truck fees. The ROI is there, and the sustainability factor is spot on.”
In guest rooms – air quality, recycling options, low-flow toilets/faucets/shower heads, aluminum water bottles, sensors that turn off lights and the A/C unit are becoming standard focused options and guests are noticing and appreciating the effort. Gen Y and Gen Z make up most travelers today and they seek out and care about sustainable and wellness focused hotels more than ever.
Retail Store F&B and Self Check Out Upgrades
A shift in upgrades in retail stores is evident in many hotels everywhere and it’s interesting to see that F&B Directors and Managers, and even VPs at the management company level, are taking on the role of key decision makers and stakeholders in deciding F&B product offerings in retail grab n’ go stores.
Rigsbee notes, “Retail market centers and stores have organically become a key focus for us at iDEAL Hospitality Partners because of the robust food and beverage options that have become trends post-Covid. Design/construction, planograms, and products that sell with a strong ROI and give guests the choices they want are key topics with most every hotel customer we talk to”.
Technology that allows guests to check out on their own solves labor issues and guests love they don’t have to wait in line to pay for a bottle of water. Full healthy meal options, hydrating products, snack options that are better for you, and even specialty coffee and tea is found in so many hotels today.
Jill explains, “Think about how many billions of dollars hotel brands spend on ‘sleep’. The food in the retail space should really promote their mission of rest, not disrupt it with unhealthy products that keep guests awake.”
In summary, creative technologies and sustainable, wellness minded solutions have entered our market at a stronger pace than ever before and hotels are recognizing the many benefits, if it makes sense financially and provides guest benefits.
Jill Rigsbee says, “I’ve never been prouder than I am right now to work in the hospitality business. I have seen resiliency and innovation at its finest in the face of a pandemic. It’s truly humbling and emotional. Let’s go forth and keep rising into 2022!”