BUSINESS NEWS European Hotel Investment Conference: Ian Taylor reports from London event
‘Labour scarcity is biggest challenge for hospitality’
Labour shortages remain the biggest challenge in hospitality despite rising cost pressures, say industry leaders and investors. Radisson Hotel Group chief
executive Federico Gonzalez told the Deloitte European Hotel Investment Conference last week: “The worst challenge is the scarcity of labour.” Stephen Walker, principal at
private equity firm KSL Capital Partners, which specialises in travel and leisure investments, argued the Covid-19 pandemic was “a wake-up call for the [hospitality] industry”, saying: “We realised our labour base was eroding. People were leaving for jobs as truck drivers.” He warned: “The future is
going to continue to be employee constrained. We’ll solve some of that by technology and people doing less of the work, and some by multi- tasking and not paying different rates for different roles, say for housekeeping and serving lunch.” Dalata Hotel Group chief
executive Dermot Crowley told the conference: “The most important thing is to make the sector more attractive and treat people better. A
Booking.com looks at providing capital to hotels
Booking.com is considering making capital available to hotels and resorts, the accommodation platform’s vice-president of fintech risk products has revealed. Abhijit Prasad told the
travelweekly.co.uk
From left: Dermot Crowley, Dalata Hotel Group; Stephen Walker, KSL; and Emma Underwood, Midland Grand Dining Room
recent survey in Ireland found the industry is still an unattractive place to work. It’s hierarchical – kitchen porters are not seen as important as food and beverage managers. We have to treat people with more respect and pay people better.” Crowley said: “Housekeeping is
a key issue. We became reliant on people from outside the UK and Ireland and with Covid they went home. In Ireland, we had a campaign saying ‘Mums and Dads, we need you’ with shifts that allowed them to drop off and collect their kids from school. We offered flexible working to students.”
conference: “We’re investigating potentially making capital available to seasonal businesses, for example ski resorts. “We have so much information
on what drives conversion for hotels. Can we help hotel decision-making and then perhaps provide some capital?” He noted: “We’ve not started
He suggested “flexibility is a big
advantage in hospitality”, adding: “Asking people to do more isn’t going to get us to where we want to be. Housekeeping is a difficult job and the hardest to recruit for.” Emma Underwood, general
manager at the Midland Grand Dining Room at the St Pancras Renaissance Hotel in London, said: “People feel pushed and undervalued. During Covid, employees were looking for safety and security. Now they want to be somewhere that is not understaffed, and with eating and laundry facilities because they are worried about their energy bills.”
this, we’re investigating. But we could do it over the next 18 months.” Prasad said: “It is completely
different business model. Until five years ago our model was very simple. We took content and made it available. We didn’t get involved in transactions. “Then we found more than 75% of customer queries related to payment. Suppliers had chargebacks and other issues. So we took the decision to get into
Sector’s outlook ‘positive’ despite threat to margins
Hospitality leaders and investors remain confident in the outlook for the sector despite forecasting a deterioration in margins over the next year. Radisson’s Federico Gonzalez
said: “We designed a five-year plan in 2018 [and] felt positive in 2019. [But] I feel more positive now. There are huge opportunities around the world no matter the economic situation – more today than in 2019.” But he warned: “There will
be a deterioration in margins in the next 12 months because of energy costs. We need to obsess on revenue management.” The Indian Hotels Company
managing director and chief executive Puneet Chhatwal agreed, arguing: “There are more opportunities than a few years ago. The sector became more efficient than it ever was.” Krysto Nikolic, senior
managing director and global head of real estate at private equity fund ICG, said: “We try to look beyond the immediate recession. The most destructive thing is over-reacting to short-term challenges.”
transactions. Today, about 40% of transactions are through us. But there is financial friction. “Customers want a booking
to be as flexible as possible. They want to be able to cancel up to the last minute. The want to pay as late as possible. Hotels want certainty. They want payment as soon as possible and don’t want cancellations. There is a disparity. We decided to get into removing the friction.”
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