January 18, 2023
5 Trends to Watch: 2023 Hospitality
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- Workforce availability to remain a challenge - For many hotels, the pandemic exacerbated the challenges of finding enough qualified workers to fill jobs. While a predicted rise in the overall unemployment rate could alleviate some of the shortage, the industry likely will continue to face structural labor challenges, driving adoption of new technology and practices, such as checking in guests via mobile app or kiosk.
- An expected uptick in distressed situations - After shelving projects and depleting capital reserves during the pandemic, many hotel owners likely will seek new financing or try to extend current financing to make property upgrades and repairs. But as interest rates rise and access to capital tightens, some hotels may find themselves in distress and be forced to sell assets.
- Technology continues to raise privacy concerns - Hotels increasingly are using technology that tracks and analyzes guest preferences to deliver more personalized service and better connect with guests. While guests may enjoy the benefits of having their preferences known and met, the ways in which their personal data is stored, mined, and potentially sold is subject to a growing number of laws and regulations that hotels will need to consider.
- More hotels likely to incorporate ESG into construction and operations - While Europe has led the way in early adoption of environmental, social, and governance (ESG) standards, the United States appears to be catching up. To promote sustainable construction, the U.S. Inflation Reduction Act of 2022 includes new and expanded incentives for "green" buildings, and federal legislation requiring corporate ESG disclosures is expected to be introduced over the next several years.
- Higher insurance costs could hit the bottom lines of many hotels - As storms, hurricanes and flooding seemingly become more frequent and more destructive amid changing weather patterns, many commercial property insurers are raising rates to account for climate-related risks. These rising costs are on top of the other types of insurance that hotels generally purchase to cover everything from cybersecurity threats to employee liability claims.
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