Robert A. Gilbert, CHME, CHBA, President and CEO, Hospitality Sales & Marketing Association International (HSMAI)
For many in the hospitality industry, 2022 has been a year of recovery that has exceeded all expectations. Leisure travel has continued to exceed expectations, group travel has started to rebound in more markets, and many are continuing to experience record level ADR growth. Unfortunately, not everything is rosy, and effects of the pandemic are still being felt in labor shortages, especially at the unit level of hotels. Inflation – and all hotel operating costs – continue to rise, and the economists are still debating whether we’ll see a recession or not in 2023.
As we enter our third year of uncertainty, HSMAI continues to provide important insights and opportunities to connect and learn. Our Advisory Boards, filled with industry experts in sales, marketing, revenue optimization, and global distribution, continuously discuss and offer perspectives and questions on the current trends. We offer spaces for collaboration, innovation, and discussion around the most pressing topics in the hospitality industry in our Executive Roundtables. We learn the views of the next generation of leaders through the Rising Leader Councils. In 2022, we had a better than ever week at Commercial Strategy Week; we brought back Curate in-person for the first time since 2019, focusing on the rise of commercial; and we held our third annual Sales Leader Forum, a conference designed for above property, seasoned, sales professionals. I think it is safe to say that our work at HSMAI has also exceeded expectations for 2022. I’m grateful to the Board of Directors, Advisory Board Members, Rising Leader Councils, staff and to YOU, our organizational members.
I recently spoke with the HSMAI Board of Directors about what they expect 2023 will bring. These executives represent a diverse range of hotel and partner company types and sizes, so they are a good sample of the hospitality and travel landscape. Three big issues surfaced as a key focus of all companies.
1. Economy – will there be a recession?
- The good: Many predict the recession will not happen at all – or be very light – but they are optimistic that strong ADR will continue into 2023.
- The not so good: One the other hand, some think inflation will grow, we’ll see a recession, and general economic and geopolitical uncertainty damper growth expectations.
Bottomline: Everyone is keeping a close eye on the economy.
2. Demand drivers – customers continue to travel, but will business travel come back?
- The good: Many believe that leisure travel will remain strong, groups will return, corporate transient will grow, and customers will continue to prioritize travel and travel experiences.
- The not so good: Uncertainly around business travel. The tech layoffs in Q4 of 2022 and the reports of major companies bringing back their travel restrictions is making some execs nervous about business travel. Inflation may slow down the pace of leisure spending.
Bottomline: Monitoring consumer behavior in leisure, corporate travel, meetings and conventions will continue to be critical in 2023 to help prepare.
3. Talent – labor shortage is still an issue, but less so.
- The good: Many are reporting an easing in the labor shortages and the recent tech layoffs could provide a larger pool of highly qualified candidates. Many also reported that some of hospitality associates who left the industry are coming back.
- The not so good: There is still a high demand for line employees to provide core services, impacting customer experience and ultimately sales. Labor costs at all levels are higher than ever.
Bottomline: Talent acquisition and retention will continue to be a big topic in 2023 but leaders are hopeful that good talent will be easier to hire and retain. Keep an eye out for the HSMAI Foundation State of Talent in early 2023.
Wherever 2023 takes us, I expect the hospitality industry to remain resilient as ever. I hope our paths cross in Los Angeles, Toronto, Long Beach or somewhere else along the way! Best wishes to you for a happy and healthy 2023!