With 2007 freshly minted, hoteliers can focus on new issues. Some will be carryovers from yesterday, but the dawn of a new year means we should use innovative solutions to tackle old problems.

At a recent International Society of Hospitality Consultants (ISHC) meeting in Miami, the 10 biggest issues in the hospitality industry were identified for 2007. Not surprisingly, number one is finding and retaining qualified workers. No longer just a Canadian issue, hotel operators around the globe are facing the same daunting challenge: Where will tomorrow’s workers come from? The association suggests growing your own employees; hiring guest workers; and paying for productivity and job enlargement. Here is a quick look at some of the issues that will be making news in 2007, with further analysis coming in the March edition of Hotelier.

Higher Construction Costs: As hotel brands compete to develop more properties, the number two issue will be increasing construction costs. Though the rate of growth is slower than previous years, construction costs — driven primarily by the cost of materials — are expected to increase in 2007. Look for operators to bump up the use of pre-fabricated components.

Changing Demographics: Every day about 8,000 baby boomers turn 60. Rampant globalization and increased demand for experiential travel are also part of the worldwide shift in demographics. And while boomers will be the primary concern in the short term, Gen X’ers and the Gen Y set are also coming into their own. What does that mean for hoteliers? Better hotel designs, more technology, and growth in medical spas.

Brand Proliferation: With an estimated 140-plus hotel brands — up from approximately 89 in 1995 and 110 in 2000 — there’s a brand explosion going on. But is more choice really necessary, or is the market getting saturated to the point of confusion? What does brand proliferation mean for the franchise operator?

Travel-Permit Restrictions: The events of 2001 changed the tourism landscape dramatically, and new security arrangements are making travel more challenging. The introduction of the Western Hemisphere Travel Initiative and the proposed introduction of high-tech security cards in 2009 may create further worries.

Capital Availability: Like hotel development, the availability of capital is cyclical. According to the ISHC, signs of a cyclical plateau are starting to show. Though the market is currently buoyant and has performed strongly in recent years, significant operating risks remain. Hotels are a demanding management-intensive business, and if opportunistic investors leave for greener pastures, a sizeable source of capital will leave the sector as well. Hoteliers and investors should be aware of these trends in order to plan more effectively.  


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