HR is changing, hospitality should be part of that change.

Week 15 - Extraordinary trends in all sectors, google as always "innovating".

TLDR: To Long Didn’t Read

B-Locations are recovering quicker. Google is innovating in the hospitality sector (again). Gas prices in Europe will likely go up again. China is now the one outsourcing labour, while India has surpassed China in Population. HR is changing and in hospitality, if you learn from it your profits are likely to grow. Differentiation with experience economy is our bread and butter, yet other industries are adapting it more.

1. Main Hospitality News

Core news related to the industry

B-Locations have shown post-corona recovery quicker than others. Why? Hard to say, but looking at German statistics, hotel affairs consulting has clearly tracked a trend of B-Locations (i.e. Bonn, Hannover, Dortmund) gaining higher occupancies quicker than locations like Frankfurt & Hamburg. All while, in those locations non-chain operators have lost market share & chains took over empty inventory.

Google Maps might have the highest potential when it comes to AI-like content. According to a recent skift article, given Google’s knowledge of your personal whereabouts and the extremely rich data it has on almost every location worldwide, with an AI algorithm like chatGPT google maps might become the ultimate tool for recommendations. Will be interesting to see how that algorithm will differentiate your semi-acceptable lunch breaks and the ultimate restaurant experience you had on a holiday while intoxicated.

Google has introduced an Instagram story-like feature to browse hotels. A function, that is purely designed to give site visitors the opportunity to look at hotels differently! Another option that might take away more market share from giants like booking and give Google more travel market share. (More on this here)

Investment in hotels has dropped to 2014 levels. Caused by high inflation & high-interest rates (arguably both part of the same problem), investors are focusing on safer properties. New objects with more predictable ROI. More on the date here.

2. Externalities

Econimics, finance, geopolitics. All have an impact on the hospitality sector. This part summarizes those.

Gas prices in Europe are not here to stay. As some of you EU residents might have noticed, gas prices have dropped. There are positive vibes going around that we do not actually need Russian gas and that all has ended well. Unfortunately, that is wrong. Several factors have allowed EU to survive this winter without gas. A very mild winter (abnormally). Purchase of liquid gas on the market (from Qatar etc.) at record high prices and most importantly the shutting down of major industrial production like that of steel. This is a trick that EU can pull only a few times before the economy will likely fall into turmoil. Hence, for you gas-burning businesses out there. You got a 1-2 year break, but switching to another energy source is still crucial. Finally, if Europe decides to go for liquid gas (imported from elsewhere), current prices will triple long term.

China is now the one outsourcing their production. This is a title one would consider unusual given China was the main location for manufacturing for the whole world. Indeed, China has now reached a certain level of maturity for a typical Chinese salary isn’t the most affordable on the market. Additionally, Chinese own companies are now mature enough to outsource and export elsewhere. A trend that might be one of many will change the world economy into something else. (source)

On another side, India has just surpassed China in the population count. 1.420.775.850 people. The source does not indicate if India surpassed at 850 people or 849, nonetheless, India is first now. With an annual GDP growth between 7-9%, India might become the next big thing. Not only economically, but also touristically. While Indian world traveller share is still relatively low, if current trends continue, this will surely change.

3. Academia

Scientific papers are being published every day. Including the hospitality sector.

A highly efficient HR department in hotels can impact the overall Organizational Citizenship Behaviour of hotel employees. A hotel-specific study looked at HR departments in various hotels and found a correlation between HR best practices & employees’ perception of their role and treatment by their employer. While it sounds obvious, the results basically indicate that a well-oiled HR department can prevent churn, increase employee participation and therefore efficiency and finally profits.

4. Readable

Books, podcasts & the big stuff.

Given this week's news and opinion pieces, one ought to learn how to differentiate. The Experience Economy is a great way to start. A book looks at multiple examples of services & physical products that have succeeded in impacting the guests on a much deeper level than the rest.

5. Tips & Tricks Tools & SaaS

Any new software you can use? Industry tricks you missed? All of that is summarized below once a week.

What to watch out for when setting up hotels’ IT infrastructure? Connection points between the software of course, so that staff does not spend their days putting data from one sheet to another. How? Read up here.

How to follow the experience economy trend and improve your service product? The experience economy is an ever-growing topic in our age of the service industry taking over a major part of the economy. Often businesses are looking towards hotels for inspiration on how to build experiences, but that does not mean hotels are the best it at. A recently detailed guide on engaging the guests emotionally is available here.

HR as a company practice is changing. While many associate negative connotations with their own HR department, this recent article gives a good insight into what HR of the future (for some present) looks like. Here.