Jan. 1, 2021

Five Trends Expected in the Hotel Industry in 2021

Five Trends Expected in the Hotel Industry in 2021

Trying to predict when travel will return feels like a bit of a fool’s errand. 

There are simply too many variables in play to get a good sense of when we’ll see meaningful turnaround. That said, if we zoom out and connect some dots based on what we’ve experienced in previous downturns and what we’ve seen in the hospitality industry at large over the past year, a picture starts to become clearer.

Moving into the new year, we can start to make some educated forecasts about behaviors and practices that are likely to emerge.

Staffing will be slow to return

  • While most staffing is based on occupancy, what no one is talking about are the efficiencies gained by having to cut staffing so dramatically earlier in 2020. Hotels have been able to operate for nearly a year on a reduced workforce. Departments have closed and probably won’t return anytime soon (especially if it never made any money) and people have left the industry, making it harder to find talent. Ok, that last one won’t be a direct cause for slow staffing return, but it is a major consequence of the downturn. If you had trouble finding staff for open positions before the downturn, it’s likely to be orders of magnitude more difficult when you need to staff up again.

More hotel companies will enter the vacation rental space

  • The one segment that has performed “well” throughout 2020 is the vacation rental space – and you can bet that there are hotel companies out there that are trying to figure out how to get a piece of the action. Marriott has been pushing the Homes and Villas product as has Accor with their newly launched Homes and Villas product. As hotel construction slows and expansion opportunities dwindle, this is a market ripe for takeover. 

Reviews will be more important than ever

  • About 70 percent of guests leave reviews if they are asked (most aren’t), but fewer guests in 2020 has meant far fewer online reviews. If there is one truth in hotels it’s that when occupancy drops, mistakes start to happen. The frenetic pace of a consistently busy hotel almost ensures that eyes and hands are everywhere, and everyone is on their game. With everything that the past year has brought, it’s completely expected (and normal) that a handful of basics have fallen off but as occupancy starts to pick up and basics aren’t brought back in line quickly, your hotel could start to see more negative reviews than normal; and since overall reviews are down, it could be much harder to dig out of a slew of negative reviews, pushing you down the list and making it harder to grow our occupancy as the same (or better) rate than the market.

New fees start to be introduced

  • Before the downturn, we were starting to see the proliferation of amenity and resort fees. This adoption obviously slowed but as hotels need to look for new sources of revenue and boost profit, and pent-up demand has guests more willing to open their wallets, we can expect to see this move to new fees return. 

Preventative maintenance / room refreshes will drive up expenses in the middle of the P&L

  • All PM has largely been put on hold. Rooms may have gone weeks between guests. Similarly, staffing may have been reduced to the point where performing regular maintenance and deep cleaning hasn’t happened for a long time. This causes two issues – the first is that it takes longer to refresh a room. The second is that it results in a larger that typical expense to get back on track and do work that has been postponed. Getting ahead of the curve now, while occupancy is low could help you avoid a litany of problems and consequences down the road. 

What do you think we’ll see in the new year that hotels should prepare for?

Questions? Have I missed any points? Need to brainstorm a topic? Share below in the comments — I’d love to hear them and help!