Human Capital in Hospitality in AEMEA Region: Rise in the Hospitality 'Footprint'
By Thomas Mielke & Chris Mumford
Tuesday, 29th January 2019

AETHOS Consulting Group's London Managing Directors Thomas Mielke and Chris Mumford have gathered their collective thought leadership and now share predictions, concerns and issues for 2019, and while some of these issues transcend across borders and continents, the commentary here pertains to AEMEA - Asia, Europe, Middle East and Africa.

1. Impact of Politics and the Economy on UK Hospitality Workforce:

The political environment in certain European markets such as the UK is stoking a high degree of uncertainty for hospitality businesses and provoking concerns over the health of the economy, transaction activity and labour market. In addition, increased competition, high rents and (food) inflation, are all putting significant pressure on operating costs. Furthermore, in some mature markets in Western Europe, wage growth is not keeping pace with rises in cost of living and the hospitality sector, with a high dependence on lower-paid labour, is particularly at risk from an increased manpower shortage. In the UK specifically, the impact of impending Brexit has already seen significant drops in job applicant numbers within hospitality and one can assume that this fall will not be reversed any time soon, whatever Brexit's outcome.

2. Oversupply of Hotels and Rooms in the Middle East:

In the Middle East, in particular Dubai, hospitality players are dealing with a 'self-inflicted' challenge, namely substantial oversupply. It is true that, to date, the region has been outstanding in constantly re-inventing itself to generate demand, having successfully positioned itself as a destination and transportation hub between East and West. However, despite all the hopes placed on Expo 2020 and the 2022 Qatar World Cup, hoteliers and restaurateurs are facing some harsh realities right now; given the oversupply, advisory firms are constantly revising performance figures downwards. To some extent, this is a sign of a maturing market. As such, we can expect more owners to begin taking things into their own hands and increasingly opting for franchise agreements to try and gain back control and to drive the bottom line themselves.

3. Artificial Intelligence and its Effects on Human Capital:

The application of data and artificial intelligence will continue to be explored aggressively in the pursuit of better yield, more efficiently targeted customer segments, and the ability to create more profitable F&B promotions. We also expect to see a continued exodus of expensive western expats in the Asian and Middle Eastern markets as companies seek to both leverage technology for lower level roles and to promote home-grown local talent into senior positions. Contrary to the situation in Europe, the strong growth in visitor numbers and supply in markets such as Japan is forcing countries to review their immigration policies and begin to loosen the rules in order to service new hotels with sufficient staffing levels.

4. Minimalistic and Humble or Extravagant and Luxurious?

Humble and smart concepts will outpace extravagant luxury in growth. We are NOT predicting the fall of luxury operators but rather that smart money is likely continuing to be funneled into "no frills" concepts that stand out through their solid, reliable product offering. Think 'lean luxury' at Ruby Hotels in Germany, R.evo in Austria, private equity darling B&B Hotels of France, or Emaar's Rove concept.

5. Offshoots of Hospitality in Other Disciplines:

We are also seeing the worlds of hospitality and serviced-offices morphing with the rise of local and regional players challenging WeWork in the co-working space. Think Design Offices and Kafnu. These brands are incorporating Food and Beverage as well as Meeting and Events and even accommodation, thereby providing more competition to the lodging and restaurant sectors. Expect to see more hotel groups desperately trying to get a piece of this action in the very near future.

6. Increased Hospitality Footprint:

"Footprint," the new buzz word that can be interpreted in multiple ways. First, owners and operators will continue to look much more critically at their space utilisation and potential untapped revenue streams. Think more retail-led environments and significant improvements to hotel F&B concepts to lure in passers-by, as well as much more shared-spaces to enliven public areas and generate additional revenue. Second, owners and operators alike will re-evaluate more carefully their "local footprint," i.e. their specific micro-location in town centres, tourist hot spots etc. They will cleverly outsource their hotel services to neighbours and local businesses and to once again become a "community hub" (think Accor). And third, travelers and consumers will continue to become much more conscientious of their own socio-ecological footprint. They will more critically evaluate their choices in regard to food, transportation and lodging.

As a consequence of all of the above, owners and operators will likely look for different talent. Flexibility, creativity and "taking ownership and initiative" will become much more valued character traits. Cross-industry exposure is equally sought, for example in Food and Beverage, but is not without its challenges as many companies struggle to successfully integrate these 'outsiders.'

Diversity will remain high on the agenda in 2019. At the General Manager level in particular, many hospitality organisations are seeking ways to actively build pipelines of female General Manager candidates and will ensure that one of every final two candidates for an open position is a woman.

Companies will also want to re-evaluate their compensation schemes and salary bands. If hiring from the retail sector, for example, hospitality companies may well find that their current compensation packages are not sufficiently attractive to engage the right talent.

At the "no frills" end of the market, many lifestyle hospitality concepts are known for offering 'up-and-coming' talent the chance to prove themselves -- many of them still under the misguided impression that because they have a unique "cool" product offering and culture they can offer below market salary packages.

We are beginning to see a mind shift in the younger generation of employees as they "speak up" and point out that they are being given significant responsibilities which are often not commensurate with their financial packages. This generation is also well aware that the concept of job security that their parents may have once enjoyed does not apply in the current world of work. With the amount of ongoing M&A and consolidation activity in the industry, no one's position can be taken as guaranteed.

AETHOS Consulting Group is a global advisory firm serving the hospitality industry. The firm enhances value for its partner organizations via access, know-how and fresh thinking. Core competencies include executive search, compensation consulting, business strategy and psychometric assessments. The firm is designed as a single partnership operating from ten locations in North America, Europe and Asia Pacific. www.aethoscg.com.

Global Brand Awareness & Marketing Tools at 4Hoteliers.com ...[Click for More]
 Latest News  (Click title to read article)

 Latest Articles  (Click title to read)

 Most Read Articles  (Click title to read)

~ Important Notice ~
Articles appearing on 4Hoteliers contain copyright material. They are meant for your personal use and may not be reproduced or redistributed. While 4Hoteliers makes every effort to ensure accuracy, we can not be held responsible for the content nor the views expressed, which may not necessarily be those of either the original author or 4Hoteliers or its agents.
© Copyright 4Hoteliers 2001-2023 ~ unless stated otherwise, all rights reserved.
You can read more about 4Hoteliers and our company here
Use of this web site is subject to our
terms & conditions of service and privacy policy