“ Recovery is ongoing , no doubt about it . Travel is here and is here to stay . What we ’ re seeing is that occupancies are actually coming back quite nicely .”
— JAN FREITAG
room-rate pricing power is .” With an adjustment for inflation , those projections for when room rates will return to the pre-pandemic figures of 2019 extend from 2023 up to 2025 or beyond .
While global supply chain issues are responsible for driving up many of these expenses , labor is a major factor , too .
In fact , Freitag identified labor as the “ single most important topic ” for spa owners and operators right now . In light of the Great Resignation , COVID-19-related health concerns , and historically lower compensation compared to other sectors , the labor shortage sits at the fulcrum of many of the industry ’ s most pressing challenges .
100 % Still , as long as occupancy , RevPar and ADR continue to climb , there are opportunities to mitigate expenses in other areas , especially for owners and operators who are willing to get creative .
A Reshaped Market Looking ahead to travel trends in 2022 , Freitag noted the strong correlative relationship between business travel and return to office , at least for higher-end establishments . Remote work has plenty of benefits , but — as Freitag pointed out from his own virtual panelist ’ s chair — it also makes it easy to think ,“ If you ’ re not in the office , why am I going to fly to the city you ’ re in ? We might as well just do this , right ?”
This disruption isn ’ t spread evenly across the industry , however . For instance , occupancies for limited-service hotels have been strong this year , because they serve business travelers who perform hands-on labor jobs . Alternately , as we continue to see the spread of new COVID-19 variants , coastal markets are likely to experience greater upheaval due to the continued impact on international travel .
To accommodate restrictions and mitigation practices that may remain in place for some time ,“ I think we ’ re going to see a lot more innovation around automation ,”
Freitag said . He offered this example : There ’ s no need for a guest to stand in line at the front desk behind 30 people for a room key when it could just be texted to them , allowing them to immediately be on their way .
Similarly , shifting practices in areas like housekeeping and food service can provide another opportunity to streamline costs . By meaningfully evaluating guest preferences ( perhaps utilizing some of those critical data points Freitag mentioned ), owners and operators can make responsive adjustments . This may include changes like limiting housekeeping for multi-night stays , eliminating turn-down service , or focusing on a consolidated dining menu that prioritizes quality over quantity of options .
As Ever , a Resilient Industry Looking ahead to what 2022 might hold ,“ I think if we ’ ve learned anything ,” Freitag said ,“ it ’ s that travel is super resilient . In 2007 or 2019 , when things were great , people said ,‘ I want to get away , things are awesome ….’ And when things were really not great in 2020 , 2008 [ or ] right after 9 / 11 , people said ,‘ Man , life is tough . I need to get away .’ We are on the receiving end of both of those client groups . We ’ re always there .”
Freitag stressed the importance of being aware of these distinctly different travel motivations and then catering offerings accordingly . But whether guests are booking to splurge or for self-care ,“ We ’ re not going anywhere ,” he said .
“ This high-level self-care is really at the forefront of what we ’ re providing to our customers ,” he added .“ It ’ s something that customers really , truly want and need .” As a result , Freitag remained decidedly optimistic about the future .“ The short term will be super bumpy , because this is new — it ’ s new for everybody . We ’ re all just making it up as we go along .” But when it ’ s time to look back on this period , Freitag predicted we ’ ll say we made some good calls or some bad calls ,“ But we got through this together .” ■
FEBRUARY / MARCH 2022 ■ PULSE 59