Hospitality industry reeling from supply chain issues, and more – Robb Report
On one day in April 2020, US airports were so empty that the TSA screened roughly the same number as in the late 1960s – just under 90,000, a figure down 90% from to the more than 2 million who passed there regularly. every day a few months earlier. So it’s surprising to compare the numbers now: According to the TSA, commercial airports picked up more than half of those pre-pandemic flyers, and private jet flights in the US are up 9.5% from last year, according to business aviation analysts at Argus.
Thus, journeys come to life again, filled with much-needed passengers and money. Isn’t that a good thing? The boom in the luxury market should be a sure boon for travelers in need of travel and operators in financial difficulty. But it’s not. Instead, the difficulties of luxury travel present all the major post-pandemic problems, shorthand for the economy as a whole.
Take supply chain issues. While giant freighters such as never given finally arrived at the quay, the challenge persists. This is partly thanks to China’s dedication to its lockdown-focused zero Covid strategy and closing key ports there like Yantian as a result. A luxury hotel in Oakland, Calif., only opened half of its rooms, and even then, a few weeks late, after a partial delivery of headboards from Asia; the 100 people Emerald Azzurra The elite cruise ship took off on its maiden voyage with temporary chairs and tables, purchased in a rush from Ikea by the hotel manager on board.
But it’s not just freighters that are messing up furniture deliveries: High-end resorts in many Caribbean destinations rely almost entirely on food and drink shipments, leaving gaps in menus and bar inventory. . Insiders don’t expect things to resolve quickly either: In a survey by the American Hotel & Lodging Association (AHLA), more than a third of respondents expect the same issues persist for at least a year.
For hospitality, there’s more to the supply chain than liquor bottles and bespoke chairs, it’s also people. The industry has long relied on a cabal of globetrotting guests, but border closures have kept many away during the pandemic. Exiling Russia from the global payments system due to the war in Ukraine has added an additional blow, likely to prevent – or at least eliminate – one of luxury travel’s most spendthrift cliques from moving like them. usually would.
Then there is the staff. Many luxury resorts in the United States and the Caribbean have long operated on a two-season system: in winter, the peak of the Caribbean, locals can work there in heaps of five-stars before freaking out, maybe , at a property in New England for the summer. season. Again, this border closure, coupled with a suspension of visa services, has made this system virtually impossible. Hardly any potential employee could score the J-1 paperwork needed to come here in 2020; the numbers were only slightly better in 2021.
Even though hotels relied solely on local talent, they are still struggling. “Nobody offers you a drink at the pool or the beach,” says travel specialist Keith Waldon of the Texas-based departures lounge. “Covid meant people didn’t want to be a waiter anymore.”
“There are big problems brewing,” admits Cari Gray, of Gray & Co., a private travel provider in Santa Monica, Calif. “Service is going to be forever redefined by this pandemic.” According to the AHLA in October 2021, 94% of respondents in the United States said their hotels were understaffed and 96% of operators said they had vacancies they were struggling to fill.
Yet even as service levels falter, fares have skyrocketed. Waldon says, “Prices have exploded, especially in the United States. A room in Florida that cost $500 before is $3,000 now, and a lodge in Montana that cost $1,200 per night will cost $5,000. It’s a nutty price. Figures from STR, a global hotel data and analytics firm, show rates are now significantly higher than they were in 2019, a record year for travel. A night at a luxury property in the United States then cost $290 and has risen to $330 in 2021; in the first two months of 2022, it reached $366. (Figures for luxury properties around the world showed similar increases.)
The reason is simple: demand. “We’ve been so isolated for two years, and we want to be around other humans, other cultures, so much. We’re kind of starving,” Gray notes, as confirmed by the 81.5% of American travelers surveyed by Destination Analysts in January 2022.
So much for the problems. But what are the solutions, or how do the best operators cope with these pressures? Fewer guests can mean less profit, of course, but it will also allow their stretched staff to provide better service and keep those guests happier for longer. Rancho Valencia in Rancho Santa Fe, Calif., opted for a 65% cap last year for exactly this reason, according to GM Laura McIver.
The mothballing of certain rooms for a period of time, or the guarantee that they are only sold in an easy-to-use buyout, will continue. Adding a reservation system around the pool or reserving 25% of dining room space for last-minute on-site guest decisions are two smart options Gray has seen popping up in recent months. Brooke Lavery of Local Foreigner in New York says customers are forgiving when some effort is made to make up for shortages – but there’s a limit: ‘People are sick of Covid excuses – you can’t get away with removing housekeeping services and blaming Covid [now].”
Best option for value and service? Undoubtedly, family hotels that are more aware of the lifetime value of a customer versus any possible profit at this time.
Vertical integration in training is essential to fill empty roles. Properties and chains with their own prep programs, like the Royal Mansour in Marrakech, for example, will thrive, with greater focus on honing, even retraining, local talent – it has retained its 600 staff throughout the pandemic and have been prepared to refresh their skills as soon as demand returns. The London-based Dorchester Collection, which manages properties such as the Beverly Hills Hotel, doesn’t just offer an extensive in-house training program: it sells its services through an academy of the same name to other industries keen to import Polish five stars. hospitality. Thinking beyond just training will also be key, according to Jeff Gurtman of consultancy Coyle Hospitality, which works with the world’s biggest brands. “Luxury hotels are often located in high-rent urban and remote areas, and the cost of living for workers of all stripes will put hotels at a disadvantage,” he points out. So expect housing allowances or even on-site accommodation to become more common. compensate for this.
An ideal place? While business travel is still slow, legacy commercial carriers are offering demarcated seating in their premium cabins, not only to entice travelers from economy to business, but also from charter to a first. So getting to and from this overpriced resort might become your favorite part of the trip.
Mark Ellwood is Robb’ reports editor and author of Bargain fever: how to shop in a discount world.