In 2023 the world will see a lot of recession in the corporate culture. It has a lot of effect on the hotel industry.
The recession is showing the effect on each vital operation of the hotel industry. From setting the price of the room to the recruitment in the hotel.
Let us understand how recession, recruitment, and rate are affecting the hotel industry.
In 2023 many IT giant companies like Microsoft, Wipro, Infosys, and Accenture conducted a layoff in high numbers. So it is very obvious that people will look for another job.
In this scenario, people avoid traveling and save money for themselves. Therefore, the hotel industry had fewer customers during the recession. That’s why there is a high impact of recession on hotel industry.
The priorities of the people will change for them. First, they look for a job and want to get settled. During this period, people do not want to travel and stay in a hotel. That’s how they control their expenses. This is the reason why hotels have fewer customers when a recession takes place.
During the recession, a lot of the hotel’s resources get wasted. Like room ACs, electricity, rent, and many others. The hotel industry during recession, faces difficulty in managing their expenses.
Recruitment in the hotel industry is observed to be low during the recession time. Hoteliers are facing a low budget to hire new talents and freshers in the hotel industry.
On the other hand, during the recession, when many people are laid off from different industries, the hotel industry hires this new talent from different industries. And this young generation is trying their hands in the hotel industry.
If a hotelier is hiring an employee from the IT domain, they are using their talents in grooming the technical department of the hotel. For example: to launch the hotel website, to maintain the digital marketing of the hotel, and many others.
The Hotel industry nowadays is also opening training and internship sessions. It is useful in grooming new upcoming talents. This talent is hired on a wage basis. It proves to be beneficial for the hoteliers too because they can hire them at a very basic cost and the least expensive.
Rates for all types of travel and tourism, including flights, lodging, and other services, are wildly inflated.
When there are numerous layoffs, high unemployment rates, and downsizing, all of these people reduce their travel spending.
Both the corporate budget and the leisure budget are lower as a result of the layoffs and the decrease in employee travel.
There are many ways by which hoteliers can control the impact of recession on hotel industry.
Let’s discuss each method one by one:
Offers and discounts are one of the safest methods to maintain your hotel budget during a recession. After seeing the discounts, customers can give a second thought to plan the trip at low rates.
But the discount should be planned in such a way that you can make out your basic cost and little profit margin. So that your hotel can take out all the expenses.
Cost reduction is perhaps the least preferred way to care for your resources in hard times. No one likes having to cut their cost, but sometimes it’s necessary to create financial delays and prolong the life of your property.
This could mean reducing the total of staff in your hotel, reducing working hours, or focusing on improving efficiency.
With the QloApps reward system, you can generate rewards points to attract customers to your hotel.
Also often, it’s not just about the rate; even in hard times, people seek ways to get rid of the monotony of everyday life and experience luxury, even if only briefly.
And some people just don’t want to give up their luxury lodging preferences. Luxury properties can take advantage of this by focusing on quality as their key competitive advantage.
The hotel industry during recession, has to pay a little extra to attract customers. Along with this, they have to prove why they will be the best choice for the customer.
Prove to your customer what value proposition you are adding to your service to become out of the box.
Maintain the online reputation of the hotel through marketing and advertisements. It will control the impact of recession on hotel industry.
Let people know what you are offering to customers during the recession period. It is one of the effective ways to attract hotel customers.
The impact of recession on hotel industry can be controlled by advertisements, creating value propositions, and attracting the customer.
It is just a phase of recession in the market. At this time, customers just hold their expenses, and their priorities change. First, they complete their basic needs, and then they plan for the tours and trips.
This is all for the Impact of recession on hotel industry. I hope you like our article. Please share your thoughts with us.