Accountancy and tax specialists Deloitte have released key findings from Deloitte’s European Hotel Industry Survey 2021, based on the responses of senior hospitality figures:
Staffing shortages to stunt recovery
- 76% of hospitality leaders are optimistic about the future of the UK hotel market over the next five years, up five percentage points from last year; However,
- Increasing staff costs (59%) and a shortage of skilled labour (54%) are identified as the biggest risks facing the UK hotel industry over the same period;
- Almost half (49%) of respondents are now prioritising cashflow, and hiring and re-staffing over the next 12 months; and 64% agree that attracting more staff into the sector is key for hospitality businesses to thrive in the next three years;
- Despite the headwinds, nearly half (48%) of respondents anticipate 2019 performance levels to return in 2023.
Andreas Scriven, head of hospitality and leisure at Deloitte:
“After a turbulent 20 months, the hospitality industry is facing fresh challenges in recruitment as the race for talent continues to hit the sector. The hospitality industry is more than twice as likely as others to experience recruitment challenges, so it is unsurprising to see this identified as the biggest threat to the sector’s recovery. Like so many industries reliant on skilled workers, hoteliers are looking for more ways to attract and retain talent. Some have even turned to “Golden Hello” financial incentives, demonstrating just how unusual the current climate is.
“Despite labour concerns, overall optimism amongst senior hospitality figures for the future of the industry has improved since last year. In this time, we’ve seen consumers return with gusto to hospitality following the lifting of restrictions over summer, and this level has remained high.”
Sustainability a unique selling point
Deloitte’s research also found that nearly half (49%) of respondents believe that their consumers are willing to pay more for sustainable products and services.
“Looking ahead, the hospitality industry will be looking at its post-pandemic offerings. Environmental awareness amongst consumers has significantly heightened over this period, and sustainable goods and services have become a key selling point. Hospitality leaders will not only need to continue providing great experiences, but also more climate-friendly offerings to attract the more ‘conscious consumer’. For the consumer, price remains a key factor in decision-making, and so hospitality leaders will have to carefully balance this with their own carbon-reducing ambitions.”
Location, location, location
- Edinburgh overtakes Oxford and Cambridge as most attractive UK city for hotel investment in 2022;
- Amsterdam remains the most attractive European city for hotel investment in 2022, followed by London, Madrid, Lisbon and Barcelona, respectively, as Paris drops out of the top five.
“With international travel limited for much of the year, UK domestic tourism remained popular amongst holidaymakers. For investors, too, the UK remains attractive for hotel investment, with Edinburgh retaining its top spot given the city’s limited supply for hotel development.
“Elsewhere in the UK, we have also seen London’s attractiveness to European investors improve by almost 10 per cent year-on-year. A combination of favourable room rates has attracted both business and leisure travellers to the UK capital, creating strong demand fundamentals.”
As investors look for new opportunities across Europe, Amsterdam remains the most attractive European city for investment for the sixth consecutive year.
Scriven added: “Likely factors for this include both strong leisure and corporate demand filling the city throughout the week, in addition to its well-connected airport. Development restrictions in the city also mean investment opportunities have a ‘gold dust’ appeal.
“Elsewhere in Europe, Paris has again fallen down the ranking. Despite being an international gateway city, reduced corporate travel over the pandemic means there has been far less traffic passing through. For the leisure traveller, Paris’s high population density has also made socially-distanced tourism a challenge. Investment appetite for the French capital has lessened as a consequence.”