Why so glum? There are many reasons for hotel industry optimism going into 2023.

The labor market is strong — if you're looking for work.

For employers, labor costs are up and finding a great, experienced employee is not easy.

Consumer confidence remains solid; household debt is still low though rising; business investment is holding steady; and supply chains are slowly improving.

Want more good news? Travel is still seen as a birthright as we take to the air and roads like never before! The economy is exporting more goods. Unemployment claims are at rock bottom, and even gas prices are declining, albeit slowly.

What is preventing us from hearing great hospitality industry forecasts for 2023?

There is talk of recession, high inflation, high interest rates and general uncertainty. People are digging into savings and watching their spending both at home and when traveling. The interesting thing is that many Americans, including economists and politicians, do not know what will happen with the 2023 economy.

Here is my take on the tourism economy.

The reemergence of group and corporate travel will supplant the excess leisure travel that will subside in 2023. We will be fully recovered in occupancy and rate from 2019 in most markets in the US.

In previous recessions — yes, we were in a recession caused by coronavirus and hit a technical recession this year — we dropped rates. This time, we held rates and travel demand held up. Was it better revenue managers, better tools or luck?

Yes, labor is still a challenge. However, we are operating more efficiently. What we must do now is operate more effectively.Managing Effectively

Our guests want and deserve more. We must improve our company culture, win the war for talent and deliver superior service. If we do that while keeping the cost of customer acquisition down, we can improve both revenues and profits.

To drive the revenues, we will need to have great content and execution in our digital marketing, great websites and strong social media and public strategies.

To keep the costs down, we need to identify the guests who cost more to acquire and limit those bookings to off-peak times.

One of the biggest needs is training management teams to train employees. Many supervisors and managers today were promoted from front-line positions. They likely never took a “train the trainer” course, and they may not have been trained on proper operations in the first place due to pandemic strain.

Before sharing your business plan with your team, it is critical to have your company vision, resources and action plan available for all to read and receive via a briefing. I have found many employees lack proper training on technology assets, lack awareness of brand or management resources and do not know if there is a guiding vision.Disruptors

What kinds of disruption will 2023 bring? Cybercrime is at the top of my list. There are bad actors out there and having backup plans is not an option; rather it's a must.

The bottom line here is to have zero trust in our systems, strong training on what to do in the event of system failure and preparation for all potential events — this includes natural disasters, active-shooter training and all disruptors.Quick Thoughts for Success in 2023

The biggest thing on my to-do list for 2023 is a change in pre-arrival communication with our guests, coupled with a “high-tech, high-touch” approach while guests are in-house and followed by a sincere "thank you" after the stay.

The pre-arrival note will be personalized based on any guest preference information we have. The management touch at breakfast will no longer be a recommendation I make to our managers; it will be required as that is the “secret sauce” that differentiates great hotels. This will include using the guest’s name and following up on the pre-arrival notes, whenever possible. The follow-up will be a sincere "thank you," request for a return visit and asking that they call us so that we can help make the best of their next stay — a short mention of a review of their stay will close up the post-stay communication.

To a great 2023!

Robert A. Rauch (email)
President of RAR Hospitality
+1 858 663 8998
R.A. Rauch & Associates, Inc.
www.rarhospitality.com