Four Trends to Watch in Hospitality in 2019

BOULDER, CO—Aethos Consulting Group’s U.S. partners have gathered their collective thought leadership and now share predictions, concerns and issues for the coming year. While some of these issues transcend across borders and continents, the commentary here is geared on its impact in the United States:

1. Challenges to Finding Labor for Hospitality Services

Labor Skilled to Meet Current Travel Trends: Aethos New York Managing Director Keith Kefgen weighed in that although lifestyle and wellness hotels have become all the rage, as every major chain is now involved, the real issue is the lack of experienced talent.

“We have a plethora of mandates that demand previous ‘lifestyle’ and ‘opening’ experience. The fact is, there are not enough experienced people to fill all these roles,” said Kefgen. “What happens? Companies take risks on under-qualified people, who get in over their heads. Look at the turnover rates at the well-known lifestyle companies: Schrager, Kimpton, Standard, Proper and the like—It is a veritable turnstile. More will have to be done to educate and train young managers in this arena.”

Kefgen added, “And today, travelers are expecting hotels to be sensitive to wellness issues, (allergies, spas, yoga, healthy food, workouts) and so forth. Companies that can be at the forefront in the wellness arena will have a real competitive edge.”

Issues Restricting Labor: Due to immigration policies in North America, “finding labor will be a significant issue impacting hotels and restaurants, particularly in the United States,” said Matt Peterson, managing director of Aethos’ office in Los Angeles. “Additionally, and with the rising costs of minimum wage and labor as a whole, now it is more important than ever to retain talent. The obvious response is to increase compensation, but it is just as important to train, mentor and provide career progression for employees.”

2. Use of Artificial Intelligence in the Hotel Hiring and Experience Offerings

David Mansbach, also managing director in New York, has been quick to discuss AI and its impact for human capital in hospitality. “AI is the buzzword for 2019,” he said. “Artificial Intelligence and machine learning is still so new; we have not yet even entered into the first inning. But for the foreseeable future, the hospitality industry should continue to embrace human interaction with the customer.

“As for ‘Blockchain,’ get familiar with this if you are at all involved in strategy decisions,” he added. “Blockchain technology is evolving rapidly and will change many areas of the hospitality industry, including human resources, cyber-security, healthcare and the securitization of customer information.”

3. Revenue Management Skills

Mansbach also emphasized revenue management as a key skill set for owners and operators in all facets of hospitality moving forward. “Revenue management strategies are critical. Hotel owners and operators should seek the top 1% of organizations that lead in revenue management strategy and philosophy,” he said. “Owners truly recognize the significance of investing in human capital and technology to win.”

Andrew Hazelton, managing director of Aethos’ office in Philadelphia, sees a blending of sales and revenue management skills as necessary for the next generation of CCOs. “Within the hotel industry, the lines of sales, marketing and revenue management will continue to blur and hotel organizations will move to a model where such functions merge together under a single point of leadership—ultimately making their businesses more efficient and effective,” he said. “This is truly helpful as organizations drive toward more personalized services to meet the wants and needs of customers.”

4.Experiences and Technology

In addition to the lodging sector, Aethos observed momentum in the restaurant and foodservice disciplines, as well as the cruise sector. Hazelton noted, “Competition at sea will continue to be tight as demand for cruising will increase much like it did this past year. But North American-based companies, such as Royal Caribbean and Carnival, are not only focusing each other’s customers, they are also keen to pursue those of Marriott and Hilton. With a robust pipeline of new ships to come online these next few years, the cruise industry will continue its mantra of ‘going big’ in 2019, while striving to focus on ‘customer experience’ across all segments/types.”

Hazelton continued, “As for the restaurant industry, specifically the quick-service restaurant segment (QSR), this sector will continue to focus time, energy and money into technology, marketing and loyalty programs. Over the last few years, companies such as Starbucks have led the push for further leveraging mobile technology and developing a ‘true’ loyalty program. Others will have to continue to follow.”