Inflation & Hospitality
Week 17 - Banking Closures, Inflation, and Gender Discrimination: A Research Roundup on Hospitality
TLDR: To Long Didn’t Read
This week's hospitality news includes the closure of offices and the potential for hotels to replace them, India's development of 50 new tourist destinations, Mexico's controversial railway project, and the rise of a new independent hotel chain. In externalities, the impact of AI language tools on democracy is discussed, as well as Japan's gender discrimination issue and the EU's high inflation. Academia covers a study on hospitality turnover rates, and the readable section recommends "Understanding Money Mechanics" by Robert Murphy. Tips and tricks include using ChatGPT for hotels and calculating the ROI of business trips.
1. Main Hospitality News
Core news related to the industry
Offices Out, Hotels In: The Future of Commercial Real Estate.
Remember covid and how you did not go to the office temporarily, keenly waiting to finally see some people after it is over? Some have discovered that they do not want to come back. Office space is dying and hospitality is expected to replace that. We have seen statistics where over 30-40% of offices are due to be closed. This would free up a lot of “commercial” real estate for supposedly lucrative hospitality. Or cities would actually desire to address housing shortages and change zoning rules and allow for more living space. Who knows?
India is developing 50 new destinations
In the spirit of last week’s topic, the Indian tourism minister has announced 50 new destinations that will be developed. A weird thing to hear for us in the Western world, since all the destinations are already there. Nonetheless, this concept is similar to that of Dubai. The government create travel infrastructure (like subsidizing new air routes), finances new developments (cheap loans for developers) and finally provides a marketing budget for these destinations to promote themselves. Given the high levels of corruption in India, let’s see what happens.
When Nature and Tourism Clash
Imagine your country was developing a lucrative direct train network to your tourism destination and your hotel. Cutting travel time for tourists from days to hours. Yet there is one catch, you still live in an underdeveloped country and between you and the capital city, there is a giant rainforest with endangered species and protected national parks. Welcome to the Yucatan Peninsula in Mexico. Indeed this development has caused debate this is currently holding the project up. This a problem most Western countries did not have because most infrastructure was developed before the period when people cared about nature.
New Independent hotel chain on the rise.
New hotel chain on the rise. Bob W is growing from 0 to hero in no time. On the way buying up other smaller chains to gain access to, in this case, the German market. While some fold others put everything on the line to grow.
2. Externalities
Econimics, finance, geopolitics. All have an impact on the hospitality sector.
ChatGPT will change human history (according to Yuval Noar)
What is all the fuzz about with tools like ChatGPT? Yuval Noar (the author of Homo Deus) has written a pretty extensive piece on why AI tools can change human history. In short, the main field of human society that AI language tools are impacting is indeed language. Outside generating blog posts or writing an entire thesis, one can also generate political campaigns and even art. In a society where democracy is prevalent, the conversation is the tool humans use most to impact democracy. With ChatGPT that impact can effectively be hijacked by AI and therefore change who is elected or listened to in regard to economic reform. Therefore AI will likely impact human history.
EU is pushing against AI tools like that and is currently introducing legislation that will force them to release any material they use to train these models. What remains for us to learn how to use these tools and stay ahead of those who do not.
Banking closures are slowing down
Each quarter US banks have to report their financial statements, outlining the number of client deposits they have, loans that are given out and profits from those loans. This is giving the curious observers amongst us an opportunity to see if the banking crisis is indeed over or if more bank closures are to come. Looking at a recent analysis from the economist, one can say that major banks have survived and panic is subsiding. Long-term forecasts are non-existent though.
Japan’s gender discrimination issue is being addressed politically.
While other Western countries are slowly closing the gender gap both on wage & presence in leadership roles, japan seems to slack behind. An observation that has been discussed this week by the Japanese prime minster who has instructed Japanese companies to have 30% leadership leaders by 2030. Like many other big topics being discussed across the world, gender-based discrimination is always up there.
In Paraguay, a woman was recently elected indicating how the glass ceiling is slowly being broken, even in countries where male-dominated culture is prevalent.
EU’s high inflation cannot be solved like the one of the US
Croissants are getting more expensive and the European Central Bank is worried! While in the US inflation is mostly connected to the enormous amount of money being printed during Covid, in the EU the causes are a bit more multilevel. As discussed in our previous episodes, inflation in Europe is also connected to soaring costs of energy & basic supply of products like flour and eggs. All due to the Ukrainian war and Russian deciding that they did not have enough space in their small country. Meaning, while for the US banks, higher interest rates mean counteracting their own money printing (a single variable problem) in Europe the ECB has to account for other factors. A supply problem that ECB is not in the position to solve yet desperately needs to.
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
Hospitality turnover rates vs state of the economy
A recently released study on turnover in hospitality is showing some rather weird findings. While hospitality as a whole has one of the highest employee turnover rates in the economy when other industries’ turnover rates rise, that of hospitality decreases. Meaning while other sectors have decided to find a new job, hospitality professionals decide to sit tight. Causes are unclear, yet a correlation has been shown.
4. Readables
Books, podcasts & the big stuff.
“Understanding money mechanics” by Robert Murphy is a great take on trying to explain all things inflation with reference to historical cases. Given the repetitive news cycle on how inflation is impacting our day-to-day life, we thought it would be important to read up on this stuff.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
How to use ChatGPT for hotels?
Phocuswire organized a panel of experts who were discussing how to use ChatGPT for hoteliers. Considering the value this tool can bring, make sure you do not miss out on this.
Calculating the ROI of a business trip
A recently released framework guides one on how to calculate the ROI of a business trip and the authors “strongly” push for implementing this every time employees travel. As I am sure all business travellers will be excited to do! Jokes aside ROI is often hard to calculate and if a mini survey would at least create a 70% clarity fo ROI of travel as a whole, then why not.
