Inflation is the word on everyone’s lips right now and with good reason. No matter what industry you’re in the record level of inflation is having a big effect on day-to-day business. The hotel industry is no exception. Inflation and particularly rising energy costs are having a substantial impact on the hotel rate landscape.
After consumers flush with savings built up during the pandemic, the travel industry was anticipating a robust season. Consumers were so eager to get out of the house that little could deter them, the thinking went.
But that was before a new risk emerged: stubborn, elevated inflation. It all has left travel industry executives wary. However, it is worth understanding how high inflation is hitting each travel and tourism segment individually, since the sector comprises a wide range of goods and services.
It is also worth noting that labour costs have risen hugely for hoteliers as economies have reopened. There are now more job vacancies than people out there to fill them, meaning hoteliers are having to offer higher wages. Once again increasing their costs.
How hotel industry will fare in the future?
Traditionally, consumers often forgo travel when faced with a high cost of living, however, at the moment along with consumer savings over the pandemic and delayed trips, is offsetting this. Overnight stays are recovering to pre-pandemic levels. For the time being.