Words by Peter Tudehope, General Manager, Radisson Blu Plaza Hotel Sydney
One thing the pandemic has instilled in the hospitality industry, is the necessity to adapt and change. Following two years of disruption, the hotel sector was unavoidably going to face challenges on its road to recovery. However, as the demand for domestic and international travel increases in pace and occupancy rates rise, many hoteliers are now rethinking how they do business as they move forward into 2023.
Across the various cities in the local Australian market, the post-pandemic rates of recovery are vastly different, with Sydney and Melbourne slower to build occupancy back to pre-pandemic levels.¹ Much of this is due to the reliance on international and corporate travellers to these cities and in turn, the changing face of the CBD.
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Twelve months ago, experts predicted CBDs were on the wane due to the sudden shift to remote working, yet as more companies return to normal operations or at the very least provide flexible work environments, it’s evident CBD and business hubs will rebound.² In response, hotels in these cities are also rebuilding almost from the ground up. Unlike opening a new hotel in an existing market, established properties are returning to business like new, which for many has presented a different set of challenges and opportunities.
A consequence of the pandemic was the significant loss of experienced workers in the hotel sector to other industries. And whilst the sector is not alone in its struggle to attract new talent, it has created a knock-on effect where a large number of hotels are yet to operate at full capacity. There is no magic solution to this issue and hotel associations Tourism Accommodation Australia (TAA) and Accommodation Association of Australia (AAoA) are working tirelessly with the Australian government on visa and immigration solutions to increase the recruitment pool beyond the domestic market.
In the meantime, hoteliers are looking for alternative more immediate solutions; recruitment
The ongoing and long-term success of a hotel very much depends on how well they train and look after their team. Hotels delivering a 5 Star experience for guests need to ensure there is a consistent level of service, however, this can be a challenge when rebuilding the knowledge and experience required with teams who are new to the industry. Controlling the level of occupancy is one way hotels can address this issue, they can maintain the 5 Star service without the employee burnout. Employees are not the only stakeholders; managing the expectations of the hotel owners, the management company, and the guest experience, after a lengthy period of uncertainty and getting this balance right for the long-term benefit of each, is the most important challenge the hotel industry has at the moment.
Historically, Australians’ appetite for international travel has always been relatively high, yet with restrictions on travel, the pandemic saw a surge of interest in regional destinations, whilst the major capitals were overlooked. How long these travel behaviours continue is yet to be seen, however, hotels located in Australia’s capital cities are actively working with city and local governments to attract visitation back to the CBD destinations either by the corporate travel market, staycations and guests from regional areas.
One of the more noticeable changes post-pandemic is the increase in demand for food and beverage, and conferences and events within CBD hotels, particularly 5 Star international branded properties. There was always going to be pent-up demand for conferences and events as people were keen to reconnect after two years of social-distancing. Just as corporates are looking for alternative ways to bring employees, present and potential customers together, the hotel industry is having to pivot in order to make this happen.
While the rules around COVID-19 have changed throughout the year, people are still cautious when it comes to public space with crowds. As a result, the sector is seeing smaller events with greater demands on hotels to ensure the highest of sanitation standards are in place both front of house and behind the scenes in food preparation, this of course extends across all food and beverage services within the hotel.
It would be fair to say, creativity has been the thing that has kept many organisations including hotels open for business both during the pandemic and as we move beyond. Food and beverage within the hotel sector has been greatly impacted by issues with the supply chain and then if we look more locally, food production in Australia in the past twelve months has been greatly affected by extreme weather conditions. As a hotelier, this means menus are regularly reviewed to ensure supplies meet what we are offering and if not, we need to think outside the box and tweak accordingly, all the while ensuring our guests are provided with the same level of experience.
The hotel industry has always been driven by continuously changing consumer demands, and whilst the pandemic only amplified this, we as hoteliers can rise to the challenge and drive our individual hotel’s success forward. We have the opportunity to build on existing revenue streams, reconsider operations, invest in new technology to meet the needs of today’s modern traveller and attract new guests both domestically and further down the track internationally. The pandemic has allowed us to step out of our comfort zone and reimagine the hotel industry in a modern world.