The London office of STR, and myself as the Hotel News Now point of reference, saw our full return to the office last Friday.
All the things are in place to make this a safe return, and I think my colleagues are pleased to see one another.
There is much positivity.
The idea throughout the hotel and hospitality business is to be positive — that’s human nature in general, for who wants to dwell in dank despondency? — as leisure travel continues to move in the right direction and even some business and group travel is returning.
I have spoken to several hoteliers and those servicing hotels this week on the question of return to office and business pressures. I am at pains to report that while positivity does exist, meaning that everyone says we will eventually get back to “normal” at some point because of the admirable levels of vaccination in many markets, a huge dose of reticence continues. COVID-19 cases soar, inflation marches on for the first time for quite some time and supply chains reach breaking point for a mixture of reasons.
Realism is the word, I guess, but realism is neither positive or negative, I would argue.
It just is.
Expect the best, but plan for the worst? Expect the worst, but plan for the best?
Confidence and positivism are the quickest routes to profitability, and hoteliers right from March 2020 have been professional and caring in rolling out campaigns or cleanliness, sanitization and welcome.
So, at the risk of being a bore, there is one development that might turn all of our positivism back into negativism.
Inflation is likely to rise above 5% in the early part of the year, according to the Bank of England’s chief economist Huw Pill.
Yes, I cannot resist saying for some that might be a hard pill to swallow, especially as the United Kingdom government’s target for inflation is an annual rise of 2%.
Energy costs are set to rise as we enter the colder months. Wages have to increase to fill jobs, with so many people not coming back to their industries as 21 months of COVID-19 has resulted in many having a long, hard look at who they are and what they want to do. Hotel supplies are running short or are tougher to procure, which leads to higher costs, which leads to fewer people wanting or able to buy them.
Central banks most often control inflation by increasing interest rates, and I did read somewhere recently that a questionnaire of prominent business people revealed they were feeling more despondent about potential rises in this than they were in the discovery of a new pandemic.
As prices increase, hotel guests might book further down the food chain. Holidays remain a vital component of life, but at some point down that chain, some type of hotel is likely to suffer more than others.
Take a look at the likely spending of National Health Service staff, who put so much on the line during the darkest days of the pandemic and during their stretched working hours organized to make a concerted effort to see their pay increase.
There was a nasty ding-dong between NHS staff and their unions and the government, who of course had seen their tax base decrease and their spending on the economy rise dramatically.
According to the NHS, it has more than 1.3 million staff members. For the U.K., that’s a very high number, approximately 4% of a working population aged 16 or above of approximately 32.5 million.
NHS staff were awarded in July a pay rise of 3%—in most cases, but not all—which the government boomed was its commitment to “providing NHS staff with a pay uplift in recognition of the unique impact of the pandemic on the NHS.”
That percentage was upped from the 1% pay rise awarded in April, which the government said at the time was all it could afford.
Now that U.K. inflation is in the latest figures up year-on-year by 3.1%, that evidently means NHS staff are poorer than they were, even more so if Pill’s pronouncement proves correct.
Hoteliers will need their heartiest welcomes and grandest experiences to reach out successfully to these people.
All this said, I am getting my first booster vaccination on Thursday, so that makes my positivism quotient rise significantly, and that will increase as everyone else gets theirs, too.
And I just received notification that I have a starting slot in next October’s London Marathon, so that is good, too.
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