Energy Crisis is the Real Threat for Hotels, Says Phocuswright Study
Challenges, such as the energy crisis and staff shortage, and trends of the global hotel industry were analyzed at the International Hospitality Forum that took place at the Metropolitan Expo in Athens on Friday.
In its sixth year, the forum was organized by the Hellenic Chamber of Hotels and powered by Phocuswright, a global leader in primary market research for the hospitality industry.
“First of all we made it… We made it as an industry when things were not that clear three years ago and we went through very difficult and unpredictable phases,” Hellenic Chamber of Hotels President Alexandros Vassilikos said when opening the forum.
“But we showed adaptability, which I think is the biggest takeaway for the years to come… The way we worked, the way we evolved, the way we opened our hotels and the way we adapted the business was unprecedented. There are some destinations in the world that have dealt with pandemics before but for Europe it was a first in modern times,” Vassilikos said, adding that challenges are still around, such as the ongoing war, a very difficult economic environment and other situations that touch hotels and influence them in a very intense way.
“This forum gives hoteliers the possibility to have access to knowledge and data in order to adapt their business strategy to the fluctuations of global market trends,” he said.
The highlight of the 6th IHF was the presentation of a study by Phocuswright, which focused on the new challenges the hospitality sector is facing, such as a shortage in labor and the energy crisis.
Titled “Hospitality Reboot: Embracing Trends / Facing Challenges”, the study also presented the latest travel trends so that hoteliers can better face the challenges and also embrace new opportunities in 2023.
The challenges
“The hospitality industry has been very much shaken lately… It went from a boom to the crest of the wave, to calmer waters, to kind of a balance in 2023… But that doesn’t come without challenges,” Phocuswright European Market Specialist Florence Kaci said while presenting the study.
“Normal may not come again but travel will not stop so it’s time to adapt with the constraints that we have,” she said.
Citing data, Kaci said that energy costs is seen as the biggest challenge for European hotels with energy-saving initiatives becoming crucial steps for the near future.
“Eighty percent of hoteliers rate the energy crisis as their biggest concern across all 10 countries in the Booking.com Barometer of 2022 report, including France, Germany and Spain,” she said.
The wider economic situation is highlighted as the next biggest challenge by 48 percent, followed by staff acquisition and retention (43 percent) and cost of staff at 42 percent.
Stating that the hospitality industry is very much concerned for the near future, Kaci reminded that hoteliers have survived other crisis.
“So you’ve got crisis management under your belt, you have a much thicker skin and you’ve got the experience of navigating through these type of challenges,” she told the audience of hospitality professionals.
On the energy crisis, Kaci said that while the big hospitality players are obviously able to absorb much more of that cost, the shock is much greater for independent hotels.
“Obviously there are only two ways to really absorb those costs – by either transferring the cost to the consumer or cutting back the energy consumption,” she said.
According to the study, the trends observed to protect hotels from the energy crisis include higher booking prices and extra fees (energy fees); educating guests on responsible energy consumption; taking energy efficiency measures (better insulation of buildings, using smart appliances and thermostats); using sustainable means of transport such as bicycles and scooters; and investing in renewable energy sources.
Labor shortage
Phocuswright’s European market specialist also referred to the industrywide staff shortage as another major challenge of hospitality, highlighting that new adaptations are again necessary in the post-covid world.
“In 2020, we lost around 1.6 million of workers in the travel and hospitality industry… Labor demographics and labor-force participation are shifting, along with changes in employee preferences after the pandemic,” Kaci said, underlining that hotels right now are seeking ways to meet the new demands with less staff.
“Some are seeking to train employees to handle multitasking… Today even hotel managers have to learn to multitask,” she said.
With regard to workforce-building tactics, the PhocusWright study observes hoteliers giving bonuses or salary rises; cooperating with contractors and gig workers; giving flexible work hours; lowering education requirements; having employees share multiple roles; and upgrading technology (to offer more self-service options for guests).
According to Kaci, the long-term solution into the labor crisis has less to do with signing bonuses and more about implementing new technologies that can free time for a hotel’s staff.
At this point, she referred to CRMs (customer relationship management software).
“CRMs obviously have been existing for a long time, but now it’s about time to leverage them a bit more and understand all their capacities because they can really help hoteliers be more cost efficient,” she said, adding that mobile devices are key.
“Mobile check in, ordering food online, booking reservations for restaurants outside of the hotel… this can all help to free time for your employees,” she told the audience of hospitality professionals.
Future workers
Moreover, she said that the challenge of staff shortage can serve as a catalyst for talent management in order to position hospitality once again as an “industry of choice” and not an “industry by default” for future workers.
“We can assume that the best approach would be to attract new talent with money (higher wages) but that’s not all. We actually have to really invest in talent and training to make changes and really attract people back to the industry,” she said.
Latest trends
The Phocuswright study also included the latest trends and changes in traveler behaviors so that hospitality businesses can better prepare for existing and upcoming challenges and embrace new opportunities in 2023.
Key findings of the study include the following:
– 41 percent of European travelers consider staying in hotels that follow sustainable practices;
– 74 percent of travelers who booked a hotel in 2021 also considered the alternative of a short-term rental first;
– price is a top consideration in lodging choice as it was found to be the most influential factor in lodging decision for UK, France, and Italy travelers, while ranking second for Spaniards and Germans;
– hoteliers should stay on top of digitization as the role of technology in the visitor experience is growing; and
– hoteliers should do more to attract digital nomads as they are “here to stay” – 58 percent of digital nomads are over 35 years old and have a higher income and higher education than leisure travelers.
The 6th International Hospitality Forum was held on the sidelines of the HORECA 2023 hospitality and F&B exhibition.
The Greek Travel Pages (GTP) was a media supporter of the 6th International Hospitality Forum.