Accross the globe, the hotel sector has 'turned a corner' and performance is nearing pre-pandemic levels, according to new research from JLL.
The Hotel Global Asset Management Report states that the UK, UAE and Qatar are all predicted to post higher ‘revenue per available room’ than in 2019.
The research looks ahead to a complex economic environment in 2023 and sets out a series of recommendations for investors to ensure they can optimise profits and mitigate risks.
Europe's complex outlook
In Europe, while the numbers back the recovery message, the outlook is still 'complex', according to the firm.
Rastko Djordjevic, head of asset management, said: 'There is no doubt we have turned a corner this year in the sector and Europe has led the way as we recover to almost pre-pandemic levels of performance. But a range of factors, from fears of recession to the Ukraine/Russia war, make for a complicated picture next year.
'At a time of economic uncertainty, we expect the hospitality industry to continue its recovery but possibly at a slower pace. Hotel owners and operators can give themselves the best chance to succeed in this new environment by embracing creative solutions to attracting demand and maintain high service levels.
'Owners and operators will need to embrace a defensive approach to asset management, remaining razor focused on their operating structures as they continue to navigate the challenges of running a hotel during such unprecedented times.
'As such, the role that hotel asset managers play continues to be critical, with hotel owners requiring strategic management of their hotel portfolios.'
In response to staff shortages in a tight labour market, JLL experts urge consideration of new labour strategies to help maintain quality, from investing in automation software to designing creative pay and work structures.
JLL also warns against rate rises in response to inflation unless they can be matched by improvements in quality. Instead, hotels should look to offset inflationary pressures with careful analysis of operational costs and identify possible cost-efficiencies, such as in energy/water use or even food and beverage costs.
The new report also sets out new opportunities emerging from changing trends in the sector. For example, corporate groups now have different needs in the hybrid working world as they look for shared experiences like culinary classes and wine tastings while weddings have come back at a quicker pace than expected and digital nomads are a growing customer sector with specific requirements.
Lastly, JLL recommends focussing capital expenditure on improving the physical product, such as renovating rooms, in response to the high number of new hotels entering the European market. This will enhance the value of the real estate and protect market share against new competition.