Exclusive Feature - Hospitality Industry, Post-Pandemic Evolution, Part One (core tangibles and intangibles).
A most challenging and unprecedented situation.
New waves of consumer demands and preferences, stronger competitors, and investor expectations are bringing about unprecedented changes in the way business is being conducted. As more companies seek to pivot amidst the challenges, how can we rethink and strategise to ensure we turn this period of uncertainty and volatility into a brighter future?
The hotel industry has survived many economic crises in the past, and there is no question the industry will survive this crisis too. No clears indications at this stage that demand levels will decrease in the future. The human spirit is resilient – so is travel and hospitality. People will always gravitate to what they want most which is new experience and human interaction. The long-term view is cautiously optimistic, but the present crisis is a fierce wake-up call for our industry.
While no one can accurately predict the course of the pandemic (3-4 years of disruption), it is expected that the timeline for recovery will be bumpy and most probably will occur in phases – domestic first, followed by international travellers. Consumer attention will be focused on countries and destinations that have managed the pandemic better than others.
We have to expect the unexpected and have a long-term view. The core business of providing hospitality and experiences has not changed. Neither has the basic rules of doing business – revenue-cost-risk-profit. But the pandemic has tested the ability of owners and operators to differentiate, innovate, eliminate formalities, and create clear competitive advantage.
A unified team of experienced and talented professionals with a focused vision and clear objectives is simply a must to pull through this crisis – including diverse and inclusive hotel executives who have faced past crises and know how to adapt and thrive in the post-pandemic market dynamics. This is not only a matter of trends; it is a question of evolution and growth.
How can hoteliers adapt to the factors that are shaping the future of the hospitality industry and resist the temptation to believe that things will return to normal?
Revisiting the basics and understanding the trends that are driving demand are important and necessary processes. People will still travel for business and leisure, of course, but they will travel smarter, favouring low-risk destinations and the safest modes of travel.
Planning and strategising are essential in any business, and in the current situation, the hotel industry has to ask some fundamental questions: "What have we done and achieved so far? What should we do now? What's next?". Too often, the hotel industry is smart enough to know what to do, but far too slow at doing it. And do remember that a “strategy without execution is useless and execution without strategy is aimless.”
In response to changing travel patterns, behaviours, and budgets, it's clear that business models need to be reconfigured. Hoteliers must focus on searching for new sources of business, crafting new SOPs, setting new targets, implementing new efficient technology, reimagining and rethinking all amenities and offerings, and creating new contingency plans. Taking a microscopic view of operating expenses (without reducing the quality) has to be part of the process.
Crises tend to change industries. And in a world of changes that includes, amongst others, major behaviour, lifestyle, financial, and political shifts, anticipating what the future of hotels looks like is so very important to get right. Responsive and resilient business models have to be put in place and embraced by all.
A culture of revitalisation and adaptability plus a positive attitude towards change is simply a must. So is the elimination of past bad habits. Accepting the “status-quo” for a period of time is in most cases, a gradual decline into failure.
The pandemic has accelerated the process of revitalisation and challenged many widely held ingrained beliefs about how organisations should operate.
Adaptability is the ability to learn flexibly and efficiently and to apply that knowledge across situations. During crises and periods of transformation and systemic changes, adaptability is critical to success.
Within the next decade alone, we're likely to experience more progress than we've seen in the past 50 years. In this fast-evolving landscape, hotels will have to adapt the hospitality experience to attract a broader audience. And this offers an excellent opportunity for reinvention.
In a pandemic of this dimension, the handling/control of the cash flow has been and will remain a top priority for most organizations. Fortunately, the attitude of the lending community/financial institutions has been much more thoughtful, flexible, and patient in supporting the industry with loans and working capital.
In today's ever-changing, uncertain business environment, adaptability is essential. Here are a few guidelines on the post-pandemic trends, behaviours and expectations that the industry and organisations must adapt and respond to:
Trusted leadership and responsible governance
Adaptability comes from trust. In these uncertain times, there is no space for political, self-focused, inexperienced leaders. We need visionary trendsetters that walk the talk, lead by example, create strong teams, and demonstrate leadership agility.
Leaders who are driven by values, selfless principles, facts, empathy and put results before ego. The building of trust is simply imperative.
A learning mindset; fresh thinking, learning agility, emotional flexibility, decisiveness, and openness to experience are all part of a multidimensional understanding necessary to thrive. Change initiatives has to come from the top, and embraced by all.
People need to feel supported when they need to shift and adapt to new directions. Open communication, acceptance of failure, and rewards for success are essential. In this environment, strong leadership is paramount.
It has been proven that creative minds are an asset to the hospitality industry. Anyone with outside-the-box thinking and unique ideas can thrive and advance in this demanding business and ultimately help their companies remain competitive and successful. These people are highly valuable – and needed.
A people-centric approach
The hospitality industry has always been and will remain a people-first business. People are the ones who make great brands and great organisations. Loyal people are the ones who help companies come out of the doldrums when things are bad and ultimately pull through crises. This will always be the case, and organisations must respond with new training, improved rewards, effective succession planning, opportunities for career advancement (career vs job), pleasant and safe working environments, flexibility, adaptability, and empathy.
Leaders have to recognize and accept that people have different sensitivities/expectations and have to find effective ways to create a culture of unity and alignment toward the common objective.
A flat hierarchy and a democratic decision-making process that allows people to take ownership should be the norm. This has to be supported by a strong culture of empowerment and acceptance of responsibility. Remember that success also depends on employee experience – which should be great.
Elimination of internal silos
While the industry has explored not working in silos for years, there hasn't been much success in this area. The need to break down silos between hotel departments and functions has never been more important, especially as the industry moves towards travel recovery.
Focusing on the 'we' and not on the 'me', being accountable, and taking responsibility is a must for all employees within an organisation. Each member must know what their role is and what is expected from them.
To facilitate the elimination of silos, organisations should implement effective measurement metrics that outline rewards and incentives for the whole team. Team KPIs with clear, measurable processes are essential for the long-term progress of any company.
Priorities – 'First things first'
Health and safety considerations have become the primary concern for consumers in the post-pandemic world (especially when it comes to international travel).
Travellers are paying much more attention to the various security, hygiene, and health protocols that establishments are implementing. Thermal scanners, quality of indoor air, touchless/contactless options, digital and mobile devices, biometric systems, voice recognition, robot-assisted deliveries, secure pre-payments, pre-check-in, and lobby kiosks are just a few examples of the new trends and expectations.
A health identification system may become mandatory for medium/long-haul travel. And amongst others, we must always watch for, and protect against, modern terrorism threats. Hotels and hospitality-related facilities are considered soft targets.
Making hotel guests comfortable, both physically and mentally, is simply a must. So is the importance of personalising their stay. Well-being is a clear customer expectation and takes precedence over location, brand, points system, and other factors.
Post-pandemic, hotel customers will be making purchases based on different criteria and expectations. This could be a clear business opportunity for the industry to adapt, respond, and maximise. Think consumer confidence at the forefront.
Technology and digitalisation (Hard-Soft-Hybrid)
Digital transformation is here to stay. Consumers are becoming increasingly digitalised, and demand for digital solutions has increased, especially among younger generations. Digital requirements should be central to the plans and strategy of any organisation, now and in the future.
Practical technology, such as an efficient cloud computing framework, the use of artificial intelligence, of extended reality, robots, voice technology and others have become necessary to drive value, efficiency, and to facilitate new business demands and opportunities (including new digital booking channels). Properly applied, technology plays an essential role in recovery. (And… are you preparing for cryptocurrencies and cybersecurity?)
Technology enhancements and digitalisation efforts should focus on facilitating and enhancing guest experience, revenue generation, efficiency, strategic planning, and decision-making processes. Do remember that, in this industry, tech cannot replace the human touch. “Humans make things happen”.
Influence and value of food and beverage in hotels
Good and exciting restaurants are a large part of the hotel stay experience, especially for upper/luxury market travellers.
An interesting and successful restaurant concept is a great way to differentiate a hotel, effectively creating talking points and gaining followers.
Food and beverage is an integral part of hospitality. It is highly competitive and demanding, and a committed and motivated team of experienced specialists and professionals are needed to stay on top of trends. These are the people who will satisfy different tastes, preferences, and expectations – and maintain the consistency critical to overall success.
Hotel design of the future
Hotels are a combination of bricks, marble, mahogany, orchids, style, and culture. A pleasant, interesting, and practical design is a key element of the guest experience. It’s important for developers, architects, and designers to understand the changing complexity of modern consumers and to adapt to the ongoing social changes, guest’s and workers' needs, and economic factors.
There is a clear trend away from cookie-cutter properties towards unique, tailored hotel concepts focused on personalisation, practicality, wellness and well-being, privacy, smart technology, and sustainability. A balance between safety protocols and guest experiences, and between automation and human connection.
It is the desire of every hotel brand to be distinctive and stand out in the market. But what drives the concepts and the design of the hotels of the future is the market audience, the brand image, the cultural representation, and the efficiency. A designer’s dream should not be an operator’s nightmare. Hotels are built as part of the local community, and they must succeed and generate ROI.
A must for new building designs to be environmentally responsible and as eco-friendly as possible; efficiency-utilities-recycling facilities-quality of indoor air-carbon/emission output and so on.
Sustainability
Clear indications are that consumer behaviour will be more oriented towards conscious consumption and minimal waste. Sustainable products, responsible brands, eco-friendly policies, ecological products, and environmental concerns will all be of greater interest in the post-pandemic world.
Ethical standards that meet societal needs should be a top priority for any organisation. The industry has to move beyond symbolic statements on sustainability and put in place clear metrics and KPIs. Curbing emissions and mitigating climate change is a clear responsibility, as this could pose huge challenges in the future.
This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.
Giovanni Angelini
A 50 year veteran of the Hotel-Hospitality-travel industry with a wealth of experience acquired in 4 Continents, Asia in particular. A long term resident of Hong Kong and Retired Chief Executive Officer of Shangri-La International.
A board member of several large corporations and member of many industry related and quality management organisations. Founder of Angelini Hospitality, providing consultancy and advisory work to developers and hotels-travel-tourism organisations.
Recipient of two Honoris Causa (Doctorate) in Business Administration and in Global Business Leadership, four Lifetime Achievement Awards, the 2006 Corporate Hotelier of the World, Maestro del Lavoro (2014) and of several other recognitions and awards.
www.angelinihospitality.com
Book: Winning Hospitality - Practical advice for sustainable success (Kindle Edition)
In Winning Hospitality, Giovanni Angelini condenses around 60 years of international hospitality experience into tips and advice for hotel operators and owners, senior and young executives, students, teachers, and anyone striving for excellence in the demanding and dynamic world of travel and tourism planning and management.
The text serves as a vital reference for anyone seeking to develop the business activities, teams, brands, skills and hotels necessary to delight guests, customers, employees, and owners alike – today, and for many years to come...
