With summer now a distant memory, hoteliers are looking forward to a good last quarter before putting a bow on 2023.
It’s been a strong year for hoteliers as occupancy and room rates continue their positive trajectory. But with inflation continuing to mount and talk of a recession still looming on the horizon, one wonders how long will the good times last?
That was a question posited to the panelists at this year’s annual Hotelier Investment Roundtable, produced in partnership with Marriott Hotels of Canda, and staged late this summer at the St. Regis Hotel in Toronto. According to most of the participants on this year’s roundtable, the bubble shouldn’t burst any time soon (see story on p. 10), however that remains to be seen, barring any last-minute geopolitical disturbances, which of course, can never be predicted. The consensus was that thanks to strong business fundamentals, the perception of Canada as a safe haven for investment, as well as incredible pent-up demand, which continues to fuel strong tourism numbers around the globe, the future continues to look promising.
The panelists also noted as well, that labour challenges, while still prevalent, have subsided somewhat in recent months. But, while that may be the case, they also noted that labour costs are expected to continue to increase over the next few years. This reality was recently evidenced by the labour agreement finalized at the Fairmont Hotel Vancouver, where workers received an 18 per-cent wage increase (over a three-year term) and where housekeeper’s daily workload was reduced in order to reduce the likelihood of injury. Additionally, gratuities at the hotel will increase and housekeeping staff will see an immediate increase of $0.40 per hour and the employer will improve contributions to the pension and RRSP. Workers at the hotel will also receive an increase in the midnight shift premium, a higher wage floor for new employees and a holiday for Truth & Recognition on September 30. The labour agreement reached by Fairmont and Unifor, is significant in that it will undoubtedly fuel other similar hotel employee agreements across the country.
Of course, while many would like to believe that AI and technology will help the industry deal with labour challenges and shortages, Hotelier’s roundtable panelists believe the most positive outcome of AI will be its ability to reduce the mundane tasks currently being handled by staff and thereby allowing staff to have more time to focus and excel at delivering great customer service. And, that’s a welcome benefit given that it’s more important than ever to ensure high customer service levels as a result of the higher rates being charged by hotels. As hoteliers know, in this new, ultra competitive environment, if customer service levels fall dramatically, it will only lead to customers pushing back on higher rates. Let’s not forget, after all, that there’s a symbiotic relationship between high room rates and high customer service levels. One without the other just doesn’t work.