HOSPACE 2022 – Overview and looking ahead to 2023
After two years of huge challenges, hospitality enjoyed a bumper year in 2022 as pent-up demand drove business. However, as the Permacrisis (a word that was recently chosen as Collins English Dictionary’s word of the year) shows no sign of abating, 2023 has already been labelled by some as the “year of coping”. In this article, we reflect on some of the insights from HOSPACE and the hospitality industry in 2022 and look forward to what trends we might expect to see in 2023.
Despite the ongoing cost of living crisis, sustainability continues to be a driving force behind many of the decisions made by owners, operators and investors. The current costs of energy and our reliance on fossil fuels have made more sustainable options a preferred option in terms of future-proofing.
Speaking at HOSPACE in November, Danny Pecorelli, Managing Director of Exclusive Hotels, noted that while their collection of hotels may include some challenging designs, they have put sustainability into every decision they make. This has led to the introduction of wild swimming pools, technology-led solutions and a gradual movement from gas to induction in the kitchens.
Unfortunately, many operators noted that none of this comes cheaply, but the cost of not doing something is even higher.
Danny’s commitment to sustainability was later recognised as he was deservedly announced as the winner of the Inspirational Sustainability Leader of the year award.
From a recruitment perspective we are continuing to see trends from 2022 expected to continue throughout 2023.
Culture continues to play a determining factor in decisions candidates make to accept new roles or stay in current positions. We have spoken before about how candidates want to share the same values as their current and prospective employers.
The way in which companies communicate and act on these values will be seen as a crucial factor in successful recruitment and retention. The cost of living is also a huge factor as many candidates are starting to see moving jobs as being an easier route to an inflation busting pay rise.
With inflation hitting double figures in recent months, any pay increase less than this is viewed as a real terms pay cut. Moving jobs is often seen as the best way to increase a wage packet and we are now seeing remuneration expectations hitting +20% on current wages.
2023 – A Coping Year
With these additional costs and an uncertain revenue forecast facing hotel operators in 2023, it is no wonder that a number of commentators at HOSPACE were referring to “A Coping Year” ahead.
Hospitality has faced huge challenges in the last three years and those that have come through have developed a significant level of resilience.
In many ways, the Pandemic Pivot was a lifeline for hospitality as it forced operators to adopt new technologies and ways of working to directly improve the customer and employee experience.
While this agility and adaptability were necessary survival techniques in 2020/1, these skills will be used to continuously improve processes, control costs, boost revenues and drive profits in 2023.
Previous recessions saw hotels forced to drop rates and drive occupancy to maintain profits. With many hotels still struggling with being under-resourced and the costs of selling a room increasing alongside the cost of living, many hotels will be looking to maintain or even increase rates. Some operators are potentially closing parts of their building or restaurants to save costs.
Overall, it does look like the luxury sector may be in a stronger position to adapt to the current challenges. Their ability to pass increased costs onto customers who can still afford luxury is a comfort that won’t be reflected at every level of hospitality, which will be faced with a carefully balancing act of cutting costs and raising prices.
Although 2022 has been a bumper year, we’re seeing a degree of caution for 2023.
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