Despite the effects of the pandemic, the hospitality and tourism industry is well on its way to a full recovery. At the same time, the industry is undergoing several shifts to build resilience with consumer confidence and operational efficiencies.
A recent International Luxury Hotel Association (ILHA) webinar panel discussion reviewed the trends, shifts and concerns the hospitality industry faces and included Lisa Cain, associate professor, Chaplin School of Hospitality and Tourism Management, FIU; Natalie Castillo, first vice president, CBRE; Kate Burda, CEO and founder of Kate Burda & Co.; Gloria Fu, independent public company board director, PropTech Investment Corporation II; and Karla Maria, corporate and community relations manager, FIU Online.
The following includes seven significant takeaways discussed during the ILHA webinar sponsored by FIU Online and the Chaplin School.
1. Career-ready graduates will help the recovery
As the shifts continue to occur in the hospitality and tourism industry, a stream of professionals well educated in the nuances of a post-pandemic market will be key to a recovery, states Maria. For this reason, higher education will play a great role in building the workforce, culture and responding to the need.
“FIU has designed the Career Engage micro-credentialing pathway to help make graduates career-ready and provide them with tools and certifications to have greater impact,” Maria adds.
2. Organizations must create the demand
It’s not enough anymore to just build it and hope people come, rather, industry revenue growth depends on effective demand creation, explains Burda, and sales and marketing are key.
“How do we engage our customers in a way we haven’t before?” asks Burda, “One, have a revenue strategy, and two, within our marketing and sales approach, take a deep look at your approach to customers and how you engage. Are you engaging in a product- and price-driven conversation or are you taking a deep look at what your customers care about, rather than your product?”
Burda underscores that personalization in the customer experience and customer engagement is key. Having a revenue strategy is mission critical. Of the organizations Burda’s company had been working alongside with, very few had a revenue strategy, she admits. About 90 percent of organizations fail to create a revenue strategy. Another 61 percent of organizations don’t align strategy to financial outcomes, and, on average, Kate Burda & Co finds $1.5 million dollars of revenue are lost without teams even realizing, she offers.
3. Travel as we knew it has changed
According to Fu, the idea of luxury travel has changed since the pandemic started. This can be seen on social media through individuals’ postings. This change is driving organizations to find new segments of demand. For example, corporate travel has changed, she notes. There are fewer meetings face to face because of pandemic restrictions. Fu feels there will be a ramp up in demand, however.
“People are anxious to get out, I just think there will be more appetite in the future,” she affirms.
4. New need for control of expenses
Castillo points out that organizations are really scrutinizing profit and loss statements to find ways to cut costs. Expenses have gone up, she comments. Moreover, Castillo mentions how labor costs will continue to creep up with the rise in minimum wages.
“A lot of organizations are just trying to figure out how we counter that—how do we go around that, is there technology that can help?” states Castillo.
5. Sustainability issues provide changes
“Sustainability has become a really hot topic, but paying customers still want luxury treatment,” offers Fu. She notes that there is a cultural mindset that is shifting and will continue to shift. Cain suggests that new graduates and education will help to infuse the hospitality and tourism industry with a new cultural mindset—a mindset that considers profits and purpose.
The new trend across the industry is to do more with less, summarizes Burda, who underscores the value of knowing the short-, mid- and long-term influence of operations. In this way, organizations can be more purposeful and have greater impact.
6. The way people travel has changed
Until now, international travel has been severely limited, however, the panelists agreed that as the pandemic and restrictions are lifted, this will pick up in September. Using 2019 as a benchmark for the hospitality and tourism market, Castillo predicts the market will grow to those levels again.
“CBRE research is saying that we expect the majority of the markets to be back to 2019 levels by 2023,” she notes. Originally, this rebound was predicted to hit much later at the end of 2024, but the robust economy has shortened the recovery timeline.
Also of note, remote work is providing valuable experiences because while there may not be as much international or corporate travel, people are realizing they can work remotely in the destination of their choice. Understanding this, destinations that feature outdoor escapes have been more resilient within the hospitality and tourism industry.
7. The luxury traveler is still spending
While the luxury market has experienced the effects from the pandemic, luxury travelers are still spending money. Instead of traveling to Europe, they’re staying stateside, frequenting restaurants and destination travel in the U.S. instead.
The panelists all agreed that what worked in the past for the luxury industry is not what works now. The industry must make changes, especially through new revenue strategies, to rebound from the COVID-19 pandemic. Though the hospitality industry emphasizes its legacy, recognizing the difference between legacy and nostalgia may be the key to long-term sustainability in luxury travel.