The hospitality industry is still finding its share of highs and lows even as life has begun returning to normal. Thankfully, traveling is back which is bringing business back to hotels, bed and breakfasts, rental properties, restaurants, etc. This has led to an increase in guest reservations and bookings for many properties. But there are various obstacles the industry needs to confront like global affairs, effects of the pandemic, staffing issues, and supply chain issues. A lot of these problems come down to the basic principles of supply and demand and inflation.
Issues Affecting Hospitality
Global events have affected the hospitality industry. China recently experienced a COVID-19 outbreak which is having a negative effect on the supply chain as ports have been forced to temporarily close or not operate at normal levels. This outbreak will also likely cause the already high inflation levels to persist. Shipments to the ports will be delayed and potentially cause shortages of many products. The container shortage has caused the price of imported goods through containers to the United States to rise significantly. The United States imports a lot of goods from China, so this will be an issue the industry needs to follow closely.
The war in Ukraine has had an impact on the hospitality industry as well. Sanctions have been issued on Russia, disrupting trade on the international level and will likely contribute to an increase in prices. The hospitality industry, through Airbnb, has stepped up to help with the refugee crisis by having hosts offer short-term stays for free or at a discounted rate. Through the generosity of the hosts, refugees will now have temporary housing relief to help with all the turbulence and chaos they have experienced over the past few months. Also, people in the United States have been booking Airbnbs in Ukraine while not using the booking, as a way to donate to the Ukrainian citizens who many are donating in turn to the local army. InnStyle has been happy to be a part of relief efforts for refugees in Utah and has donated products like sheets, towels, and amenities.
Unfortunately, properties are still struggling to find enough staff to meet the demand. They have made it known that they still have open positions that they are trying to fill. Some properties have tried posting jobs online and get many initial responses with candidates simply disappearing as they progress to the next steps in the process. Other businesses have raised their wages, offered referral bonuses, and are offering better benefits to attract talent. With a large volume of companies hiring at the same time, this is a problem that could persist for the next few months and possibly years.
With labor shortages and global issues, many businesses have had no other choice but to raise their prices. A hot topic in the news has been the increasing cost of a tank of gas. The average price for a gallon of gas in May was $4.24 per gallon which was an increase of more than a dollar from this time a year ago. When gas prices increase, the cost of transporting goods increases which have helped ignite the price increase of goods and products in many industries including hospitality.
Properties are thinking of different solutions to help solve some of these issues they have been confronted with. 3 important ideas include the following:
- Supply Chain- Ordering earlier and larger quantities than usual will help keep inventory levels in better shape because it is difficult to predict what the supply chain will be like months or even weeks from now.
- Inflation- Don’t be afraid to increase room rates to keep up with the increasing cost of doing business. Prices are rising across most industries and hospitality is not an exception.
- Offer lower room occupancy, increased worker pay, and additional benefits if faced with staffing shortages to keep staff you currently have happy.
InnStyle Will Help You
There are many problems and obstacles that the hospitality industry is currently confronted with. The difficult part is estimating when things return to normal. Properties are having difficulty placing orders due to supply chain issues and finding enough workers to keep appropriate staffing levels. Luckily, it seems like businesses are thinking outside the box to try and solve some of these issues in the short term. InnStyle is always here to help your property with your orders. They have experienced and knowledgeable account managers that will make the ordering process a breeze. Please give them a call about any hospitality questions you may have. They can be reached at 267-354-6020 or 800-877-4667. Their website is https://www.innstyle.com/.