The COVID-19 pandemic hit the hospitality industry particularly hard. The various lockdowns and travel restrictions put many bars and restaurants out of business and severely impacted the hotel industry. Now that the worst of the pandemic seems to be over and the world has opened up once again, what does the short-term future hold for the hotel, bar, and restaurant industry? Will there be a strong recovery, or has the damage been so great that the industry will suffer for years to come?
The Pandemic Hits Hard
The COVID-19 pandemic effectively brought the hospitality industry as a whole to a screeching halt for over a year, beginning in the spring of 2020. Travel was heavily restricted, and mandates kept people at home.
Many hospitality businesses were unable to survive the enforced shutdowns, while others struggled to stay in business. Worse, people changed their habits. Eating out wasn’t possible, so many decided to begin cooking their own meals rather than ordering out. Meanwhile, vacations were out for the summer of 2020, so many families found other ways to enjoy themselves in their spare time.
The general anxiety about getting sick made people more conscious of their surroundings and many became wary of mingling with others in social settings like bars and restaurants. Staying in a hotel with hundreds of other people in relatively close quarters became a dangerous opportunity to be exposed to COVID. Social life was curtailed. With each new type of COVID variant, the fears of serious illness flared up again. It wasn’t until the various vaccines were created and distributed that people began to feel comfortable about heading out and enjoying themselves again.
The Industry Rebounds
With the worst of the pandemic shutdowns over, people are heading back out to enjoy a meal or a drink with family or friends. They have realized just what they were missing in terms of social interaction. With each passing week, the pandemic fears are receding, and life is returning to normal. Travel is opening up again, and hotels are filling up with guests.
Now, 41 percent of hotels in the United States are reaching an average daily rate that offsets the recent rise in inflation. Business travelers account for much of the recovery. The trend toward remote and hybrid office models has not affected business travel, and bars and restaurants located in business destination cities are seeing a rise in their sales as more business travelers are out on the road again.
Restaurants, in particular, have adapted to the pandemic-induced anxieties by providing more outdoor seating in the warmer months. This allows patrons to enjoy a meal out without worrying about being exposed to a crowded environment. Many restaurants increased their take-out business during the pandemic and continue to offer this service for convenience. Bars are seeing increased traffic as well.
Continuing Challenges to the Hospitality Industry
The biggest problem facing the hospitality industry today is the lack of staffing. During the pandemic, many hospitality workers were laid off or furloughed. Many have not returned to their jobs, and the industry is struggling to attract new workers to replace them. A recent survey found that around a third of former workers would not consider returning to the hospitality industry. This is a serious challenge that has forced many businesses to operate under restricted hours. To attract much-needed staff, many firms are offering bonuses to new workers and increasing hourly wages. The staffing problem is likely to continue for a while, even with these measures being taken.
The rising inflation rate has hit the hospitality industry just like every other sector of the economy. Rising prices for food, along with the continuing supply chain disruptions resulting from the pandemic, are putting restaurants in the unenviable position of raising prices just as their recovery gets into high gear. Vacations may be reduced or eliminated as families struggle to keep up with rising costs all year round. This puts destination hotels in jeopardy of having unfilled rooms during their peak earning season. The looming fear of a recession is causing consumers to curtail leisure spending.
The hospitality industry had a very difficult couple of years due to the COVID-19 pandemic, but it is just now beginning to see a return to post-pandemic revenues. While staff shortages, rising inflation, and fear of a recession are causing new problems, if the industry was able to survive a global pandemic that essentially stopped its operation for over a year, it should be able to navigate these new challenges successfully.