2023 is rife with obstacles for hotels: here’s how to overcome them

Contributor: Penny Brown, Managing Director at Burgh Island Hotel 

Managing a hotel is a big undertaking at the best of times, and never more so than when unforeseen events present unexpected challenges. In 2023, the British hospitality sector is faced with a combination of staff shortages and a cost-of-living crisis. Indeed, it seems as though just as the Pandemic ended and hotels were once more able to open their doors, a new set of obstacles emerged. 

At times like this, there’s no need to despair – only to develop. In the face of such adversities, hotels will need to be resourceful and dynamic if they are to thrive and continue to operate under difficult circumstances. By making strategic improvements and prescient operational decisions, hotels can weather the current operational challenges and emerge from the storm with a stronger, more resilient business model. 

The cost-of-living crisis and its toll on hotels 

Over the past 18 months, the cost-of-living crisis has become a familiar term and a source of concern for both individuals and businesses. In particular, hotels face the threat of declining demand as consumers are forced to tighten their purse strings and forgo their traditional holidays. Indeed, while 2022 saw a 3.3% fall in the average household’s disposable income, forecasts suggest that this will grow to 3.8% in 2023. What’s more, with operational costs on the rise, many hotels have increased their prices in recent months, making them less attractive to consumers who are feeling the effects of the cost-of-living crisis.

There’s no doubt that attracting guests will be more challenging over the coming months, particularly for luxury hotels, which must now compete with lower-budget options. These challenges are not, however, insurmountable. At a time when money is short, value is key. When consumers have less disposable income, what they choose to spend it on becomes increasingly important, and hotels should use this as an opportunity to prove to consumers that their establishment is worth the expense. Hotels can best respond to this by ensuring the utmost quality of service is front of mind, leaving no room for visitors to feel dissatisfied or underwhelmed. By making this value for money clear across its website and promotional content, a hotel can increase its chances of attracting guests despite the current climate. 

Moreover, while the cost-of-living crisis will prevent some consumers from taking a holiday this year, British hotels are set to benefit from a new group of guests:  the “staycationers”. Flight prices have risen almost 30% when compared with 2022, so many travellers will consider remaining in the UK this holiday season. For hotels trying to offset the impact of the cost-of-living crisis, it won’t be enough to passively respond to this trend; instead, businesses should adapt to this changing direction of tourism by altering their offering and marketing tactics to appeal to domestic guests. Hotels that succeed in appealing to guests from closer to home, set themselves up to build a loyal new customer base from a previously untapped segment of the market. While the cost-of-living crisis presents challenges, it also offers opportunities to reemphasise the value offered by a hotel and secure new visitors who may revisit in the years to come. 

Working around staffing shortages 

Despite the pressures posed to guest numbers by the cost-of-living crisis, targeted promotion will ensure that bookings continue to flow. The next obstacle facing hotels is the challenge of providing staff to look after these guests. The knock-on effect of Brexit has combined with negative attitudes towards the hospitality sector to engender a staffing crisis that has left one-in-five businesses citing hiring as their greatest challenge this year.

One of the major barriers to attracting workers to hospitality positions comes from the negative portrayal of the industry prevalent in British society. In order to attract new joiners and retain existing staff, hotels need to rewrite this narrative and emphasise the reality that a job in hospitality can and should be more than a paycheque. 

By paying attention to each individual, their career prospects and their well-being, hotels will help to drive retention by building a lasting relationship with their workforce. Succession planning – the practice of setting out clear career goals for individuals – can help staff to realise their potential in a job. Ongoing training opportunities can keep staff engaged and supports them to hone and develop their skills so that they progress in the industry. At Burgh Island, for example, we offer our kitchen staff the chance to attend courses in sustainability – allowing them to learn more about the profession and take pride in their skills, while simultaneously contributing to the future of the hotel. Beyond nurturing professional success, hotels can build lasting relationships with their employees by taking care of their pastoral needs. At Burgh, for example, we ensured that our staff were supported during the pandemic by providing on-site accommodation for employees throughout lockdown. Through everything from free meals to mental health services, hotels can show that they care about not just the work but the workers themselves and establish lasting bonds that will ultimately drive retention and provide a testimony for new hires. 

Encouragingly, hotels have already proven their adaptability during the pandemic, and many remain in a strong position to benefit commercially but prove that they can adapt accordingly. That is why I am still optimistic about the hospitality sector in 2023.