2022 brought a mix of successes and challenges for the hotel industry. Travelers were eager to return to exploring after COVID lockdowns, and global hotel occupancy reached 5% higher than 2019 levels over the summer. At the same time, hotels continued to struggle with effects of labor shortages. Many workers who were laid off during the pandemic moved on to other industries, and ongoing visa restrictions limited the ability to hire immigrant workers. Those shortages had the biggest impact in housekeeping and culinary departments, but they affected the hospitality industry overall. Wages increased in the hospitality industry as well, requiring hotels to pay their workers more to remain competitive. The average wage for a hospitality worker increased 22% from 2019 to 2022, and 28 states increased their minimum wages during that period as well.
As for hotel guests, there were several distinct travel trends in 2022. Hotels saw fewer international visitors this year. Both visa backlogs and a strong U.S. dollar make the country a more expensive and less convenient destination. Americans are trying to balance the desire to travel with rising costs as well. This means many travelers are opting for destinations closer to home, which can bring new attention to formerly less popular locations.
Prepare for 2023 by looking back at 2022
Whether they’re called bleisure trips, mullet trips or simply extending a business trip, travel that combines business and vacation became especially popular in 2022. This can look like adding a few days onto a traditional business trip to take advantage of the location. With the rise of remote work, it can also mean working from the hotel during the day and exploring the area in the evenings. To appeal to these travelers, hotels should make sure to have free, high-speed internet throughout the property. They should also invest in public spaces that provide a comfortable spot to work and plenty of outlets.
Hotels can’t provide great experiences for their guests without great staff. To prepare hoteliers for 2023, these professionals need to think about whether they need to raise wages to stay competitive for the best employees in their market. However, wages are just a starting point. Surveys have found that flexibility and work-life balance are just as important for hospitality employees’ job satisfaction. Allowing workers to cross-train for multiple positions and offering training opportunities are great ways to improve satisfaction. Happy employees then provide better guest experiences, which lead to great reviews and repeat customers.
Changes a Hotelier should make for 2023
Many hotels have excellent employees who took on more responsibility during the pandemic. If these employees have become supervisors or managers, it’s important to make sure they have the training they need to succeed in their new roles. It’s common for training to be neglected during periods of short staffing or rapid changes. Take the opportunity to correct this now so your new managers have the tools and knowledge they need to do their best work.
There are several trends that are likely to continue into 2023. Travelers are looking to unplug, focus on their mental health and connect with nature during their vacations. They also want local experiences, sustainable practices, health and wellness activities, and technology that makes check-ins seamless and easy. With so many trends to consider, it can feel overwhelming to prepare hoteliers for 2023. You’ll need to understand your area and your guests so you can prioritize accordingly. Improving your fitness center and offering healthy farm-to-table food options are good places to start. Ensure that any technology-based check-in features like mobile keys work as smoothly as possible and have employees available and ready to solve any problems that come up. As electric vehicles become more popular, hotels should plan to add charging stations to appeal to customers driving EVs.
What Hoteliers Should Expect As They prepare for 2023
Most travelers are now booking their hotel stays within a relatively short eight to 12 week window, and experts expect this continue into 2023. Inflation and fears of a recession will probably affect travel, but it’s unclear how much disruption to expect while hoteliers prepare for 2023. One survey found that 46% of travelers felt that travel was even more important to them after the pandemic. This group seems to be continuing to plan trips despite rising costs. Additionally, an American Express study predicts that hotel room rates will increase in 2023 by as much as 30% in some cities. This increase comes from both high inflation and high occupancy rates. While rate increases won’t be so dramatic in all destinations, many cities are expected to see their average rates rise between 7% and 10%, which is good news for hoteliers.
At the same time, high inflation and a slowing economy may limit travel for some travelers despite their enthusiasm. Business travel is recovering more slowly than expected and is unlikely to return to pre-pandemic levels until 2026. Companies are cutting costs because of economic concerns, so they’re less likely to send employees on trips. This means that hoteliers should expect to see fewer of these once reliable travelers than they may have hoped in 2023. Rising costs are affecting personal trips as well.
Their money-saving strategies include taking shorter trips, opting for closer destinations, or driving instead of flying. These changes indicate that Americans are eager to return to traveling after pandemic restrictions, so they’re more likely to adjust their trips rather than cancel them entirely. Hoteliers need to remain flexible to cater to both budget-conscious travelers and those who are willing and able to spend more.
The hotel industry is facing both a promising and challenging new year in 2023. Travelers remain enthusiastic despite growing economic concerns. To adapt to these trends and come out ahead, hotel managers can benefit from expert advice. The team at NewGen Advisory knows how to prepare hoteliers for 2023 and beyond. Contact us to discuss your hotel property today.