Robin Rossmann, managing director at STR, and Michael Grove, chief operating officer at HotStats joined the Hospitality Insights team at IHIF 2022 to talk about the state of the hotel industry at the mid-point of 2022.
Predicting how the hotel landscape will evolve over the next 12 months is a tough ask. It is coming out of a global pandemic that shut down many markets for two years with the hotel industry largely kept afloat because of government support. Now companies are having to deal with the challenge of pent-up travel demand while at the same time coping with rising costs and geopolitical issues like the war in Ukraine.
“There's things that are in our control and not in our control. And I think there's a lot of that cost inflation. You can get more efficient but you can't deny the pricing pressures. And I think the only way as an industry we get through it, is if we have rates continue to grow at ahead of inflationary levels,” Rossman said
Grove pointed to energy prices as a particular area that the industry should be paying attention to.
“A lot of companies, a lot of operators, owners will still be in a fixed agreement as things stand, they're still leveraging what they'd already agreed 12-24 months ago. Of course, when they end we're looking at 150, 200% increase in unit prices. So energy I think is although it's, you know, it's considered a fairly small item in the overall p&l. Now, it's certainly not this is eroding up to 4-5% of your GOP margin. It's certainly a key consideration,” he said.
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