The Road to Recovery: How the Hospitality Industry Can Bounce Back
The last 18 months have been one of the worst downturns that the hospitality industry has ever experienced, with travel all but shut down for the majority of 2020 and hotel occupancy dipping as low as 25% in April of 2020. Now, with vaccination rates on the rise and travelers venturing out into the world again, the industry is bouncing back. Here’s what we think the industry will look like in the next year or two.
How COVID-19 Affected the Travel Industry
According to US News, the pandemic has set the hospitality industry back 10 years, with a full recovery not expected until 2024. More than 670,000 jobs in the hotel industry and nearly 4 million total hospitality jobs were lost in 2020, and only 200,000 are expected to be regained this year.
While travel numbers are bouncing back, hotels haven’t been able to recover the staff they lost. Many of them have found jobs in other industries in the meantime, while others have become accustomed to remote work and have lost interest in returning to the hospitality workforce.
Revenue may also be slow to recover. Hotel room revenue dropped by nearly 50% last year to $84.6 billion and is only expected to recover by $25.9 billion this year, leaving it 34% below pre-pandemic levels. Event hosting and corporate functions might take even longer to bounce back, given the rise in popularity of virtual events during the pandemic.
How the Industry is Recovering Already
It’s not all bad news — there are other indicators that the hospitality industry might rebound faster than these projections. The first is the travel industry at large. While TSA screenings are still down 35% from 2019, they’re up a staggering 715% from last year, indicating that consumers are impatient to start traveling again.
Travel is still heavily restricted in many popular destinations — travel between the U.S. and Mexico and travel in and out of the European Union are both limited — and this number doesn’t include non-air travel, so the numbers for all travel are even more optimistic.
Those travelers all have to stay somewhere. During the pandemic, rental-by-owner properties like Airbnb enjoyed enormous popularity since families could isolate themselves from other travelers in a way they couldn’t at a hotel. But as a result, Airbnb’s rates have shot up by 35% in the first quarter of 2021, making newly reopened hotels a much more enticing proposition. We anticipate a pendulum swing from rental properties back to hotels as the primary source of travel lodging.
The Future of the Hospitality Industry
While we’ve all been eager to get “back to normal” for more than a year, it’s also important to recognize that “normal” may never look the way it used to. People still want to vacation and they still need a place to rest their heads when they do, but what they want from those locations is shifting significantly. Here’s what hotels should be considering going forward:
- More contactless interactions: guests are likely to remain wary about close, personal interactions with other people for a while, and they’ve gotten used to the convenience of contactless delivery, pickup, and other ways that businesses have adapted. In order to stay competitive, hotels will need to embrace remote check-in and checkout, contactless room service and maintenance, and other similar offerings.
- Hyper-hygiene: unfortunately, hotels don’t have the best reputation for cleanliness. Guests won’t tolerate lax housekeeping policies anymore. You’ll need to keep up the stricter washing and sanitizing practices you’ve been using for the past year. You might even want to add cleanliness amenities to rooms like hand sanitizer, bleach wipes, and UV sanitizers for guests’ cell phones to keep them at ease.
- Embrace technology: any hotel whose operations aren’t purely digital is being significantly held back. The digital revolution was given an enormous boost forward in 2020, and businesses will need to keep up. Hotels will need to take a serious look at their use of technology, embracing features like digital concierges and welcome apps, and be prepared to invest in newer technology going forward.
Talk to Phonesuite
The travel industry as a whole isn’t going anywhere, and no matter what the future of hospitality looks like, Phonesuite will be there to help you through it. We’ve been installing the latest in high-tech voip systems in hotels across the world for more than 30 years, and we can build the perfect phone system for whatever your hotel needs may be. Curious about the cost? Get in touch today!