Global Hospitality Survey 2022

Thank you to everyone who responded to the Sousou Partners survey – Taking Stock in the Hospitality Arena. We are delighted to share with you the results including a snapshot of the answers from the respondents which offer a global outlook representing different platform types and size of company.

Despite the challenges ahead, 46% feel optimistic about the remainder of 2022, highlighted through a continued performance improvement by entering new markets and developing fresh concepts in addition to the drive for innovation triggered by Covid. There is momentum to capitalise on the expected distress and the luxury segment continues to do well.

The neutral and less optimistic respondents focused on the tough economic times ahead with the continued expectation of a slow recovery in business travel, softer leisure travel bounce back and possibly another Covid spike.

The main challenges for companies included rising costs, inflation, high interest rates, labour and contractor availability. The expected change in the financial markets will affect investment appetite and might not generate new projects.

50% of respondents expect to make changes to their company structure as a result of the challenges ahead. The companies that expect not to be making any changes also answered to be fairly / very prepared for the remainder of 2022.

Staffing challenges were repeatedly highlighted across the life cycle of employment from attracting new employees, motivation, staff development, retention and succession planning.

Staff retention tools ranged from being a great employer, having a strong focus on two-way communication, training and development, in addition to better compensation which 46% of respondents mentioned as a key lever.

53% mentioned the flexibility for working from home as a ‘here-to-stay’. There are, however, other changes that will remain because of the pandemic which we have highlighted below.

It was a brief survey to capture the current views in the hospitality space. Thank you to all who took part.

Best wishes,
Maaike Kitsantas

What are your main expectations for the hospitality space?

“Continued performance recovery”

“Stalling momentum in post-pandemic recovery. Leisure demand, which was leading recovery will soften, yet corporate demand recovery will flatten out or dip and be unable to fully offset the loss of leisure travel”

“New concept and consolidation”

“Increasing cost pressure. Slow recovering air traffic. Staffing issues. Rising interest rate environment having an effect on valuations and equity positions”

“Good time to build, develop & partner”

“Resort destinations have done very well, and I believe will continue to do so in 2022 and into 2023”

“Limited top line growth, rising costs, rising salaries coupled with scarcity of people”

“In the short term continued strong operating performance and some strong head winds in the medium term”

“Reduced business travel leading to the need for continuous innovation to adjust to changing trends”

“Strong appetite from leisure customers but end of the year could be impacted by economic crisis”

“Hotel performance will taper off as economy recedes.  High interest rates will impair hotel financing and create a drag on transactions. Labour challenges will ease as unemployment increases”

“Strong summer and good Q4… before the recession hits“

“Significant new luxury hotels being built in many markets. Strong travel recovery in most markets” 

Thinking ahead what you believe are the main challenges for your company?

“Staffing, interest rates, inflation”

Contractor availability and supply chain issues are top of mind, second to quickly changing trends in experiential hospitality”

“Investor pessimism and slow decision making”

“Getting acquisitions financed to grow our company; finding, hiring and training entry level workers at our hotels”

“Construction and operating expenses increase and uncertainties about the economy”

“Global expansion in uncertainty”

“Finding deals that make sense and talent”

“Weathering the storm. Not as bumpy as before but still trying to get a firm footing”

“Holding on to good people who won’t be making much money”

“Team resources – IT rate of change”

 What do you feel are the main challenges for you as an individual?

“Few new projects. Repositioning and repurposing existing properties will become mainstream”

“Retaining and motivating the team when transaction volumes decline, or execution becomes substantially more difficult“

“Getting head-hunters to focus on diverse C-Suite professionals”

“Constant re-invention”

“Sustaining strong and effective management teams”

“Assessing the true longer term trends vs short term challenges”

“My company is capital constrained at a time of great opportunity”

“Keeping the team together in uncertain times”

Do you expect changes to the structure in your company as a result of the challenges ahead?

“Yes, as we look to insulate against resource challenges on the development side, we will bring some resources in-house”

“Yes, project dependent, team growth or reduction”

“Yes. I believe that there will be significant management change that was delayed due to Covid”

“Yes, reducing headcount”

“More flexible working. Redesigned jobs to value roles better. No extras to fill gaps. Thus more full time hires”

“Nothing major. We may have lay-offs but, that is the normal corporate response to economic downturns”

“Some increased staffing to handle the volumes and complexity of completing projects”

What programmes have you put in place to retain staff?

“Being a good employer, appreciating staff as fellow human beings”

“Long term incentives and job role development”

“Operational entry level and lower supervisory levels received a pay rise”

“Strengthen incentive compensation and carried interest participation“

“We are a small team and pay a lot of attention to a strong culture and try to hire people that are good fits for that culture. This creates an environment where people are happy at work”

“Salary increases. Greater job content. Ability to try new roles”

“Communicate, provide feedback, introduce flexibility, reward and promote regularly and deserved, be fair and treat everyone equally”

“Variable incentives and carried interest plus other benefits”

What have you changed to attract new talent to join your company?

“Presence on digital platforms with more effective advertising”

“Flexible / remote work policies and competitive base and incentive compensation“

“Employed more recruiters”

“Acting decisively and front-end loading key interviews to gain consensus”

“Reaching into schools early on”

“Lowered expectations and increased time towards training”

“Looked at flexible working, enhanced training programmes”

“Develop existing talent as recruiting resource”

“Reward and job titles!”

“Fewer zero-hour contracts

What do you believe has been a significant change as a result of the pandemic that will remain going forward?

“A degree of remote working is an expectation of every employee”

“Lack of talent and reduced workforce”

“At the moment it is about staff shortages. In the mid to long run it will force my business to re-evaluate its working practices. This could mean a better offer but also better information to help drive efficiencies – particularly labour cost and departmental margins”

“Home office or short distance between workplace and home is key; time lost in transport is less and less acceptable. Define a purpose, stick to values”

“Focus on interpersonal engagement”

“Need for meaningful work”

What has been the key learning for dealing with the impact of the pandemic?

“Adaptability to change with the trends. Don’t hang about – invest in technology”

“Know your cost base. Keep strong engagement and communication during crisis. We retain senior teams with commitments to pay back salary shortfall”

“The importance of communication with lenders, staff and shareholders in crisis times”

“Look after your staff. Seize opportunities to relate to customers when relevant”

“Need to be flexible, understanding individuals’ external pressures and trying to sort work-life balance”

“Don’t over leverage. Diversify“

“Hotels are even riskier than we thought”

“Rely on facts and medical guidance. Respect individual concerns”

“Flexibility, decisive steps at each key stage of decision making”

“Need to be nimble and flexible with all resources – human, infrastructure, etc.”

“That the benefits of in-office coordination / presence for training, mentorship and productivity were overstated. The firm had its best year in history in 2021 and those who excelled during full-time office work also did so in their remote / work-from-home settings. Those that tended to produce inferior quality work product or the inability to handle the requirements of their position were more quickly exposed“

“Adaptation of operating standards”

The survey respondents’ profile