Unique Challenges Facing the Hotel Industry In 2022: What To Expect?

The hospitality industry has undergone several transformative changes recently, with the global pandemic, the local economy, and new technologies impacting hotel operations. These, combined with a change in guest behaviour and the rise in popularity of online travel booking, have contributed to the unique challenges challenging hotels throughout 2019 and 2021.

At our end-of-the-year-round-up, we’ve asked our leadership team what the trends and challenges for the Radisson Blu Plaza Sydney are in 2022. They look into their crystal ball and share the challenges we will face.

1. Uncertainty

The biggest challenge we will face in 2022 is uncertainty. After a very tumultuous two years, we still have so many factors beyond our control that impact market demand. These include the implications of any new COVID variant (just look at what happened with Delta and what is happening with Omicron), the flow-on effects to travel, Border restrictions (domestic and International), and overall travellers' willingness to travel. We need to be able to have some stable and ongoing trends to build accurate forecasts on bringing the business back up. We subscribe to and rely on technology more than ever before, but even with all the artificial intelligence at our disposal, it is all about wishing to have all the possible answers about the future.

2. Retaining and finding talent

One of the challenges facing the hospitality industry in 2022 will be retaining employees and finding new talent. The tourism and accommodation industry were hit hard by COVID-19, and people lost their job during the pandemic, decreasing employees’ confidence in the reliability of a job in hospitality. Due to this, a large part of the workforce is moving on to more secure sectors of employment such as healthcare or construction. In addition, the conditions and expectations have changed, both for hotel management and staff, and now employees are more prompted to re-think their priorities when it comes to work/life balance.

As an industry, we will have to design new techniques to retain top skills and talents, adopting processes that will see the worker’s productivity and morale boosted. Opportunity and career advancement, incentives, or flexible and favourable work schedules are among the ways to keep motivating employees.

3. Ensure optimum guest satisfaction and experience

“It’s not about the end, it’s the journey”. Well, it’s not about the hotel and the destination, it’s the experience. Offering clean rooms and perfectly designed services are no longer enough to maintain guest satisfaction; they are asking for more. New technologies, globalization, and the digital era have empowered the customer and increased the desire for more personalized traveling and lodging experiences.

To stay competitive in the future, we will be challenged to find a new way of branding ourselves that doesn't involve a single sign or logo on the building. We will have to set ourselves apart by providing unique designs, superior customer service, novel experiences, and offering locally sourced drinks and food. We need to generate memorable activities and mobilize social media traffic to improve the client experience.

4. The Boom of Virtual Meetings and Events

Today, the conference and events industry is going through a period of transformation, The way we think about meetings and events is changing drastically. New technologies and meeting formats are challenging the traditional ways of conducting events and conferences. Virtual meetings are becoming more and more popular with planners and attendees alike. As a result, business travellers and corporate businesses are spending less budget on face-to-face events and conferences meetings, which has an impact on the hotel industry's revenue.

Our challenge at the Radisson Blu is to develop new strategies and implement new technologies and offer alternative meeting formats that allow guests and corporate businesses to meet and interact remotely from the hotel premises. Hybrid events and Hybrid rooms emerge as two additional options to consider in the face of disruption.

5. Find new ways to do business and maintain profitability

The hotel industry is changing, and the hospitality sector is looking for ways to remain competitive and maintain profit margins. Two years ago, we used to rely on full dining rooms, a steady stream of tourists, business travellers, conferences, and conventioneers, but nowadays, we must now find a way to do business without the usual crowds. That means adapting our revenue model to match our customer’s needs and new behaviour. We need to pivot toward new offerings that make sense for our customers and to our business.

6. Start from scratch in a new reality

 After 18 months as part of the quarantine program, the Radisson Blu Plaza Sydney reopened to the public in November 2021, and we knew that this would be one of the most challenging and exciting moments for us and for the Hotel. The general feeling was that we were starting from scratch. While we are gradually returning to our regular operations, we have found difficulties training staff across all the departments to be able to deliver the consistent 5-star service our guests were used to months ago. We had to refresh the rooms, create new menus, practice social distance, wear masks, introduce rigorous health and sanitation protocols and put everything back together again in a short period. The hotel reopening has been a complex process particularly now when the industry is experiencing a significant transformation.

 As we have seen, the Hospitality industry in 2022 will be vastly different from what it is today. This presents opportunities and challenges for hotel owners. While hotels today are already meeting some of these changes with the new technology that is being implemented, the accelerated pace of change and a new environment will require us to adapt quickly and proactively if we want to stay competitive in the global marketplace.