Clouds Linger Over Sunny Forecasts for European Travel

BERLIN – While sunny skies and even sunnier projections about the fate of European travel dominated discussions on the final day of the International Hospitality Investment Forum, hoteliers acknowledged several ominous clouds are lingering on the horizon.

Chief among those worries are continued labor shortages, and the costs associated with them, the increasing need to adjust operations to make businesses more sustainable, and artificial caps placed on demand growth due to outside factors such as the continued lack of airlift.

From left, Ennismore’s Sharan, Pasricha John Philipson of Cheval Collection and Martin Stockburger of Koncept Hotels discuss the need for innovation, inspiration and creativity during the International Hospitality Investment Forum. (Terence Baker)

“Young people are asking me what our focus on sustainability is. You have to live and breathe your values. It is far more than bar tenders with tattoos. ”
– Sharan Pasricha, founder and co-CEO, Ennismore

“No experience necessary. All training provided. That’s all job descriptions need to say. This is a learning industry; we’re growing people. ”
– Mark Essex, director of skills, KPMG in the UK, on ​​“The People Issue” panel

Sustainability was the main talking point of the first day of the conference, and that did not change on the second day. Yes, sustainability is nothing new, having been a topic in the hotel industry for several years, but if not now a renewed push, then when? Surely, conference attendees said, if we can not use what was the most abrupt halt in normal trading, the pandemic, to reinvent ourselves, we will lose more ground than ever before.

During a panel on hybrid accommodation options and innovation, panelists said there is profit to be made by doing what is correct. They said the key is space utilization, with hotels now being far more than just a room for the night.

Hoteliers said that perhaps the conversion or new build will cost developers 15%, 20%, 25% more upfront, but that these additional costs can lead to a far greater boost in revenue.

They wondered out loud whether the 200-key box hotel is a thing of the past.

John Philipson, chief operating officer of Cheval Collection, said he is sure the 200-key box hoteliers realize the threat and are innovating, too.

“They will find their groove,” he said.

Martin Stockburger, CEO of Koncept Hotels, replied that some capital investors might not be willing to pay the cost of a secondary location in a secondary city, and that will lead to niche innovation in those destinations.

Whatever the final scenario, innovation will get us to the right product for the right customer for the right location.

Time to put the thinking caps on and to look outside the industry for innovation.
– Terence Baker, Senior Reporter, Europe

The hospitality labor issue is a universal one, and it was interesting to hear specific examples of how Europe’s hoteliers and major companies are handling the challenges. The common theme of a Thursday panel titled “The People Issue” was that it’s imperative that the hospitality industry change to fit today’s candidates, not the other way around.

“We have to adapt our organizations to the available talent pool,” said Laura Benoumechiara, chief human resources officer for Louvre Hotels Group. “It’s difficult because the hotel industry is an old industry and we think these things have to take time.”

And time is what the hotel industry does not have, panelists said. Companies that succeed in finding and keeping the right employees are the ones who are acting quickly, able to make offers right away, and most importantly, can demonstrate exactly what the company stands for, said Chris Mumford, managing director for Cervus Leadership Consulting.

“Employers must state their clear purpose, show their CSR, and during recruitment, really expose the company to the candidate and say ‘this is us.,'” He said.
– Stephanie Ricca, editorial director

One of my favorite things I heard during the course of IHIF was the idea that the hotel industry never truly suffered from a demand issue, even during the depths of the COVID-19 crisis. Indeed, if you look at demand as people’s collective desire to travel, that never waned for many. Instead, what decimated hotel occupancy and revenues was barriers that kept people from traveling.

For a long time, and even today in China and elsewhere, government lockdowns were the primary obstacle between the desire to travel and making that a reality, but now that seems to be shifting from a government issue to an airlift issue.

Grégory Lanter, chief development and construction officer for Club Med, pointed out that until airlines can figure out ways around labor hurdles and other issues that constrain their ability to ramp up airlift, the lack of flights will continue to be a hard barrier for leisure -travel-led rebound. While this might not be an issue in the ultra-luxury segment where travelers are able to fly private and aren’t subject to the ongoing issues with commercial airlines, that demand is too niche to carry the fate of the entire hospitality industry.

As frustrating as it is for hoteliers, they remain at the mercy of things outside their own businesses and industries as they hope to maximize the rebound.
– Sean McCracken, news editor

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