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Is the hospitality industry ready for rebound in 2022?

Dec 17, 2021

The COVID-19 pandemic halted a 10-year growth spurt for the hospitality industry, sending it straight to rock bottom overnight. Now, it’s ready for a rebound.

Some travel segments are recovering faster than others, though. Markets that cater to domestic and leisure travelers did well in 2021, once travel and health restrictions released. Consumers were eager to leave home and spend stimulus dollars during the summer months. If that pace continues, experts believe leisure travel could return to its 2019 peak by 2022.

Business and event bookings did not return as quickly however, and international travel restrictions were in place for most of 2021, affecting metropolitan markets. Business bookings may not fully return until 2024. International travel resumed mid-November with vaccine and safety protocols in place.

Limitations on international travel – and uncertainty around immigration legislation – also shrunk the employment field. The industry was experiencing a labor shortage prior to the pandemic; now it’s in a full-blown crisis. Even at the best-run hotels, general managers and corporate employees are rolling up their sleeves to clean rooms, make beds and keep bookings available. The industry was unprepared for a labor shortage of this magnitude, and it affected room availability.  

So, what’s next? A lot of factors are outside the industry’s control: consumer confidence, vaccination rates and travel restrictions. But hotel owners and managers can apply lessons-learned from the past 18 months to build a more sustainable future.

As we enter 2022, hospitality leaders should keep an eye on these emerging issues:

2022 Hospitality industry outlook

Staff and guest safety

The hospitality industry relies on employees to deliver safe and welcoming experiences, which means staff must feel comfortable at work. Guests have a heightened attention to cleanliness and relate it to their personal safety, comfort and satisfaction. Contactless solutions, like being able to check-in via mobile, may have seemed like “bell and whistle” amenities before. Now, they’re necessary. Properties must also navigate mask policies, vaccination requirements and local health mandates to protect staff and guests, often determining their own positions and how to communicate and enforce them.

Employee engagement

Every team member matters. In this labor market, hospitality companies need creative solutions to recruit and retain employees. Some properties are leveraging behavioral assessments and predictive indices to match employees to the right positions or job environment. Hospitality companies need strategies to get ahead of turnover so GMs can get off the floor and back to other pressing issues.

Labor dependence

The hospitality industry will never run without human labor, but technology can ease some of its dependence on it. Technology is driving opportunities for properties to work smarter and improve processes. With the right support systems in place, even lean teams can operate at peak performance. As properties minimize human tasks, safety and guest satisfaction can both increase. 

Tech-enabled guest experiences

Many properties are adopting customer relationship systems (CRMs), either in place of property management systems or to augment them, to generate robust intelligence about guests. With CRMs, hotels can apply behavioral data to deliver more personalized offers and experiences, build loyalty and increase guest satisfaction. Some guest interactions can be automated, and artificial intelligence can be leveraged to support guests’ 24/7 needs more quickly and easily.

Digital properties

In addition to physical spaces, hospitality companies need secure digital properties, like websites and mobile apps. Simple digital platforms can help hoteliers secure bookings and interact with guests. But that also means more platforms and tools are at risk. Hospitality companies have to safeguard guest information and protect their infrastructure. Cybercriminals are targeting hotels, even taking control of mechanical systems in ransomware attacks. Hospitality companies need to prioritize cybersecurity and create readiness plans. Securing properties, both digital and physical, requires new tools and skillsets at many properties.

Supply chain fluctuations

Every industry has been affected by disruptions in the supply chain, hospitality included. Some properties are using the influx of cash from summer leisure travel (and stimulus programs) to stock up on essential equipment and supplies. Hospitality companies need to stay aware of supply chain hurdles, plan ahead and find creative ways to fill gaps so the guest experience is unaffected by shortages.  

Lodging alternatives

Competition from nontraditional hospitality companies increased during the pandemic, presumably because some travelers preferred “less-crowded” properties or longer-term rentals. Large properties and hotel chains should keep an eye on consumer preferences, including movements toward sharing economies, niche tourism and sustainable travel. If domestic demand decreases, hotels could start to feel the impact of from emerging competitors.

How Wipfli can help

With a deep understanding of your strategic business challenges, Wipfli is positioned to help you create further value and deliver on your customers’ demands for both today and tomorrow. We are a value-driven firm, bringing new ideas to the table. By listening to your challenges and asking questions, we uncover the full extent of your needs and deliver solutions that help you achieve success. Learn more about how we can help on our hospitality industry services web page.

Related content:

Cybersecurity trends in hospitality for 2022

Creating a culture of guest delight part I: Tips to build delight

Your digital transformation journey: More than a tech upgrade

The Great Resignation: How to optimize the job-seeker experience


C. Lynne Smith, CPA (FL)
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