Staffing shortages, soaring costs and supply-chain issues continue to plague the hotel industry — and the meeting planners who have to make it all somehow work as demand for in-person events comes roaring back.
COVID-19 may be on the wane, but even if it doesn’t come back in a new variant form and turn 2022 into 2021-redux, the pandemic’s aftermath of supply-chain snarls, inflation and staffing shortages likely will be with us for a while. Hotels and other top meeting venues are facing all these issues in spades — and so are meeting and event organizers.
Complicating matters is a rapid increase in the number of in-person meetings and events being scheduled for 2022 as all those meetings that were postponed in 2020 and 2021 until this year now are finally getting a green light, just as leisure travel is picking up in a huge way. While COVID’s Delta, and then Omicron, variants caused yet another wave of cancellations and postponements to in-person meetings in 2021, almost 80% of meeting planner respondents to a recent survey said they had an in-person event planned for the first half of 2022.
Here’s how some of these ongoing challenges are affecting meetings and events.
Supply chain issues: 86% of American Hotel & Lodging Association (AHLA) members said in a recent survey that supply-chain issues were having a moderate or significant impact on operations. Almost three-quarters said supply-chain issues were having a negative impact on their revenues, and more than half said it got worse toward the end of 2021. While 46% are optimistic that these issues will resolve within six to 12 months, more than a third, 36%, thought it would take at least a year to get their supply chains back to normal operations.
Increasing costs: Record inflation — up 7.5% this year, the highest since 1982 — and supply-chain snafus are increasing prices in the expo aisle as much as the grocery aisle. In fact, cost increases are even more of a problem than the lack of availability for common hotel essentials such as cleaning and housekeeping supplies and food and beverage. According to the AHLA survey, well over three-quarters said they were experiencing increasing costs for both housekeeping and F&B supplies, as well as linens and soft goods. Those costs are being passed on, with room rates rising almost 28% year-over-year in December, according to the Consumer Price Index.
Along with rising room rate and meeting space rental fees, planners can expect to pay more for food and beverage from plated banquets to boxed lunches. More than half of planners surveyed in January said they were being hit with higher-than-anticipated F&B costs, in addition to soaring room rates. Oh, and suppliers aren’t being as flexible with their contract terms as they were earlier in the pandemic, respondents said.
Staffing shortages: Hotels in particular are also experiencing a staffing crunch, with 94% of respondents to a recent AHLA poll saying they are understaffed — and 47% saying they are severely understaffed. In fact, employment in leisure and hospitality are down by 1.8 million, or 10.3%, according to the Bureau of Labor Statistics (BLS). And it’s not easy to find people to fill all those currently unstaffed positions, said 96% of hotel operators who are trying to recruit new hires but not having a lot of success, despite increasing wages and offering referral bonuses.
And, while hotels overall are expecting this will change over the course of 2022, according to the AHLA 2022 State of the Hotel Industry Report, “hotels finished 2021 at 77% of their 2019 employment levels. Although strong growth is expected in the year ahead, hotels are projected to end 2022 with 2.19 million employees — down 166,000 or 7% compared to 2019, reflecting continued headwinds in the labor market.”
Meeting organizers likewise are having problems staffing up. While 70% of suppliers said they were having problems filling open positions, 53% of meeting planners said the same in Meeting Professionals International’s MPI Meetings Outlook: 2022 Winter Edition. In total, the MPI survey found the staffing shortage to be an issue for 60% of respondents, up from 37% the previous quarter.
The upshot is that planners likely will find themselves paying a premium for less-than-premium goods and services.
While this all make take some time to sort out, most are optimistic that these issues will eventually resolve themselves. In the meantime, these tried-and-true strategies that are good ideas during better times may be more important than ever:
- Plan ahead as much as possible — don’t wait to book your space as it may not be available, or available only at a premium price. And have a backup plan in place in case your first-choice venue just won’t be able to get the staffing and supplies you need to pull off your event in the style you want.
- Nourish your vendor relationships, but don’t put all your eggs in one supplier basket. Even though you adore your hotel/AV provider/caterer/DMC, they may not be able to accommodate all your needs when crunch time comes and their supply chain remains snarled. Honor your commitments, but keep your Plan B handy.
- Keep expectations realistic. Decide what is truly essential for your event to be a success, versus the nice-to-haves. For example, daily housekeeping may be an issue given the current staffing issues, but your group may be fine with reusing their towels and making their own beds for a day or two. If you don’t know what your attendees’ consider must-haves, ask.
- Don’t be too picky about your produce. Ask the chef to get creative rather than be overly prescriptive in the specifics of each element of each meal. They may not be able to source the baby peas you want, but they could do some amazing things with the readily available kale that will make attendees’ mouths water. Also consider ordering early, ordering in bulk, and if you can, try to coordinate with other organizations that are holding meetings in your locale over the same dates.
- Reduce, reuse, recycle. Sustainability is more than just good for the planet — it’s also good for your budget. Check out these resources for more ways to save money while supporting the environment.
- Communicate, communicate, communicate. Talk with your vendors and suppliers on a regular basis to see where their biggest sticking points are, and what they anticipate may cause issues by the time your scheduled dates arrive. Likewise, tell them as soon as you are aware of any reductions in head counts or other issues on your end that they will need to take into account.