Ahead of AHIC, which takes place next week in Dubai, HN spoke with Michael Grove, COO of HotStats, to highlight the important role data will play in the world of travel and tourism.
What permanent effect has Covid-19 had on the hotel industry?
From a data standpoint, it is still too early to assess what is here to stay or the long-term ramifications. That said, a 20 percent to 30 percent drop in undistributed labor costs in the region shows signs of a repositioning of the fixed areas of hotel operations and, in turn, a model that is more resilient to drops in top-line performance, either through further market-level dynamics or even simple low-season profit protection.
How important is data to business nowadays, especially in the hospitality industry?
Data helps hoteliers make more objective and science-driven decisions. Furthermore, it allows us to measure the output of our decision-making. In hospitality, we require data to not only access financial performance but to also assess guest needs — to shape the customer experience.
Do you believe technology will restore what has been lost in the pandemic?
Much of the technology that has arisen during the pandemic is complementary to what we already do as hoteliers. Hybrid conferencing is an obvious one. It will not replace the traditional conferencing and exhibition segment, but it will provide an element that has been necessary for sometime; those who cannot attend in person can now join and be part of these events. This, in theory, is a huge opportunity for hotels.
What do the numbers say?
Currently, the numbers are quite clear for the Middle East. Following five tough years that followed 2014, revenues had fallen over 25 percent in total, while labour costs had increased by five percent for the same period. This crisis has forced large changes to the cost base of hotels, including a current 34 percent drop in labor cost per available room since pre-pandemic levels.
Where do you see the industry in the next five years?
The core of what we do cannot change; we will still provide a place to sleep and ancillary services for our guests. In the Middle East, however, I see a move to the clustering and centralizing of labor and the inevitable emergence of third-party operators, which, in turn, will drive competition, operational efficiency and franchising in parts of the region where it is not yet common.