Having extensively travelled even during the pandemic, we at CPP have been reporting on the challenges facing the luxury hospitality sector in over 30 countries around the world. Almost 8 months post-pandemic (average – considering some countries lifted restrictions later), challenges persist:
- staffing shortages
- far less dedicated and career-oriented staff
- staff expect to work lesser hours – more flexible schedules
- staff who used to be multi-tasking during the pandemic refuse to do so, now
- major language skills
- service is inconsistent at most hotels reviewed – robotic, impersonal, lacking enthusiasm and passion
- many luxury hotels do not place guest name recognition among service priorities
- exponential increase in expenses has been impacting profitability
- hotels have been cutting back on amenities
- a third of luxury hotels no longer stock mini-bars
- most hotels have reduced in-room dining menus – no more night service (some luxury hotels offer cold sandwiches after 10 pm)
- reduced services (80% of luxury hotels no longer provide turn-down service, unless specifically requested at check-in)
- reduced staff in Front of the House – 50% of luxury hotels no longer have dedicated Concierge professionals – Concierge services are provided by Front Office staff who have become multi-tasking
- reduced security staff – some luxury hotels have resorted to third party security companies; some hotel no longer have security staff, not even during the night
- some luxury hotels have completely eliminated certain positions (i.e. Guest Relation Manager, Butlers, Concierge, PR Manager etc)
- reduced Spa menus (offerings) – less organic products included in treatment because of short validity (expiration)
- less hotels use sustainable amenities – because of cost, they prefer to buy cheaper even if in small plastic disposable recipients
- no more fresh flowers – some hotels have resorted to plastic flowers
The guest profile at luxury hotels in many destinations has changed:
- different nationalities
- wealthy (UHNWI) U.S. travellers are still not back at major destinations in Europe
- wealthy South Americans (Brazil, Colombia) spend more than Europeans
- shorter stays (average 3 nights)
- more guests expect free upgrades
- steep decline in expenditure on wellness / Spa
- lack of Ukrainian and Russian guests account for a 20% decline in revenue at many European destinations2
From July 25th, the booming demand from foreign travellers for major destinations in Europe has been declining. It will most probably reach a more stable level from mid August 2022 – due to a combined mix of reasons such as: major increase in Covid-19 positive cases, increase and spread of Monkey pox, over-crowded touristic sites, continued chaos at airports (flight cancellations) and to a lesser extent the extreme heat.
2022 will be a worse summer season than 2021 for Spain, Greece, Switzerland and Turkey. By contrast, Italy, Ibiza, and select U.S. destinations will have a record 2022 summer / autumn season. The U.K.’s hospitality sector will continue to suffer moving into autumn, with increasing utilities prices and overall inflation.
Survey / review / inspection base (June 2021 – July 2022)
30 luxury hotels (21 chain / group + 9 independent)
17 countries on 3 continents
Luxury hotels
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