New Travel Recovery Takes an Evolution

Written by Juergen T Steinmetz

2022 will see the continued progress toward recovery as the hotel industry responds to the evolving needs of the “new” traveler.

Hotels will need the foresight and the flexibility to manage through continued volatility. But the challenges of the previous years haveprepared hotels well to seize the opportunities ahead.

The demands and desires of the new traveler have implications for hotels as they set strategic priorities and focus resources and investments to effectively fulfill guests’ needs. In 2022, rebuilding the workforce, doubling down on sustainability, and reimagining loyalty will be key areas for hotels that want to be relevant to the new traveler.

Staffing challenges have hampered a return to normalcy in many hotels across the country, making it difficult to respond to growing demand. While nearly every industry experienced labor shortages last year, shortages were particularly intense in hotels because of both pandemic layoffs and a wave of people leaving voluntarily, often for opportunities in other industries.

The results of an October 2021 AHLA member survey reveal how dire the situation is now.

Nearly all (94%) respondents say their hotels are understaffed, including 47% who say they are severely understaffed. Moreover, 96% of respondents are trying to hire but have been unable to fill open positions.

As the hotel industry continues on the road to recovery in 2022, rebuilding the talent pool will be critical to serving the needs of the new traveler. After all, the industry is projected to end 2022 down 166,000 workers compared to 2019.37

Recruiting workers will also be more complicated across many industries given the intense competition.

The good news is that there is an opportunity to attract and retain employees in new ways. This can mean building on existing efforts to educate people about all the exciting career paths and provide career development and relevant skills training.

Today’s candidates care about career paths, flexible work arrangements, and skills training that keep them employable into the future. Hotels also have an opportunity to strengthen their diversity and inclusion practices, fostering careers for people of color and women and ensuring that employees at all levels are as diverse as their guests.

As new travelers look to do business with hotel brands that align with their personal purpose, hotels’ commitment to sustainability will increasingly impact purchasing decisions. A recent global survey of travelers reveals that the top three areas that consumers think travel companies should focus on in this area are carbon emission reduction, recycling, and food waste reduction. They are also interested in actions that address single-use plastics, water waste, and electricity conservation.

With hotel owners still feeling the pressure of a pandemic economy and the need to prioritize spending on the fundamentals of keeping the business running, investing in sustainability can seem like a less immediate priority. Yet hotels do not have to make the choice between “doing the right thing” and doing the financially prudent thing when it comes to sustainability.

The goal is to align sustainable investments with financial returns to move beyond a simple cost of compliance. Investing in programs that are cohesive, clearly communicated, and provide owners with a solid financial return—whether through green hotel design, driving energy efficiency through building systems, or engaging in renewable power purchase agreements on behalf of franchisees—will increasingly become the rule rather than the exception as new travelers gravitate toward brands that value sustainability and social responsibility.

Loyalty programs that target the needs of business travelers and are based primarily on accruing points will be increasingly less relevant. The imperative now programs for people who travel less and for leisure purposes. Case in point: In September 2021, 41% of travelers in the United States were visiting family and friends, and 41% were vacationing. Just 8% were on business trips, and 6% were going to a work-related convention or conference.

The reality is that loyalty schemes based on the frequency of travel are out of step with the behaviors of the new traveler and with a suppressed demand environment. And even as demand picks up in the coming months and years, the mix of business and leisure travel will be permanently changed, and loyalty programs should align with travelers’ current behaviors to truly engage them.

Hotels that reground loyalty programs in the dynamics of new demand patterns are in the best position to build loyalty. This means accounting for the experience model, data model, and business model. All of these parts work together to create loyalty programs based on human needs while supporting the operational aspects of delivering on them.

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