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Can Phuket’s sandbox be a model for vaccine tourism?

Phuket opened to tourists despite COVID-19 deaths surging on the mainland. But the sandbox provides lessons for other tourist-friendly countries in the region, says a Southeast Asia observer.

JAKARTA: Before the pandemic, Thai island Phuket offered visitors the perfect blend of sun, beach and seedy-but-fun nightlife as one of the region’s best-known tourist destinations. Now, it offers visitors something much more novel: A quarantine-free holiday.

As of the start of July, fully vaccinated visitors from select countries can fly directly into Phuket and go straight from the tarmac to the beach. Spend a full 14 days there and visitors (or savvy Thai nationals) are welcome to continue their trip around Thailand, effectively spending their quarantine term in a resort under a programme that is being called the “Phuket sandbox”.

The programme isn’t without controversy. Fears over the safety of Phuket communities, as well as cynical assumptions that few would take up the confusing and expensive offer, blighted the programme in its first weeks.

Still, if it goes well, expect to see other holiday favourites such as Koh Samui, Koh Phangan and Koh Tao accessible shortly afterward.

Thailand was the first country outside of China to record a case of COVID-19 which, paired with mass cancellations of trips from Chinese visitors, saw tourism grind to a halt in the first couple of months of 2020.

The sharp, sudden decline in visitor numbers and then eventual rolling lockdowns smashed the country, where tourism accounts for around 12 per cent of GDP.

The delicate balance between economic imperative and public health has been revealing of governments around the world. In Thailand, that balance has looked desperate as the government moved to open something – anything, anywhere – to tourism.

Phuket is a natural choice. With a long-time reputation as one of Thailand’s best resort islands, Phuket has the infrastructure, particularly an international airport, to support the programme.

And as one of the most visitor-dependent provinces in a country already vulnerable to the whims of tourism, it is among the most desperate.

A DOUBLE-EDGED SWORD

For the half a million residents of Phuket, the “sandbox” is a double-edged sword. The tourism industry has been all but destroyed by a year of no visitors, but public health is also paramount.

The government in Bangkok promised the plan would not go ahead until the community reached 70 per cent vaccination by the Jul 1 launch, which did in the end fall short – but only slightly.

The province has been plagued by the same issues as the mainland in terms of securing vaccine stock and navigating complicated online systems. Still, the vaccination programme will continue alongside the opening of the sandbox.

Full vaccination can’t come soon enough. At least six tourists have tested positive for COVID-19 after arriving on the island under the sandbox programme. One of the first to be identified was a visitor from United Arab Emirates who had taken the test as part of requirements upon arrival.

Drivers and hotel staff who had come into contact with the man were placed into self-isolation. Health officials confirmed the tourist was vaccinated fully with the Sinopharm vaccine.

“Worry more about domestic arrivals,” provincial chief doctor Kusak Kukiattikoon told local media. His blunt words refer to the growing disaster on the mainland, with new daily record deaths as the Delta variant surges through the country.

Fresh restrictions are expected imminently including restrictions on interprovincial travel – essentially ending the quasi-quarantine of Phuket before heading elsewhere.

Ironically, the launch of the Phuket sandbox may have become a spreader event for the political elite in Bangkok who attended.

Prime Minister Prayuth Chan-o-cha, who proudly attended the launch on the island, went into self-isolation after an attendee tested positive. Spokespeople for the prime minister’s office reassure that he has so far tested negative and will continue his work as usual.

AN OPTION FOR OTHER COUNTRIES IN SOUTHEAST ASIA

He may well use that time promoting the sandbox idea to other leaders in the region.

As planned travel bubbles, such as that between Singapore and Australia, collapse under the weight of new cases and unsteady vaccine programmes, the sandbox could become an option for other tourist-friendly countries in Southeast Asia.

“The sandbox is much more than just for Phuket or Thailand. It sets a possible way forward for other Asian countries,” tourism magnate Ho Kwon Ping told Bloomberg. He pointed to other possible locales such as China’s Hainan province, islands in Vietnam or even Indonesia’s Bali.

That may be overly ambitious for the time being, but it shows an industry pivoting towards creative ideas which acknowledge the pandemic is a long way from being over.

By the end of the year Phuket expects to have played host to 100,000 visitors. A long cry from the 10 million in years past but a respectable start for a devastated community fighting its way back.

Source: https://www.channelnewsasia.com/news/commentary/covid-19-phuket-sandbox-quarantine-beach-resort-travel-thailand-15225442

New coalition to fight for gender equality in hospitality

Hospitality leaders across the globe have come together to form LeadingHôtelières, a coalition working to achieve better representation for women at the highest levels.

Formed by some of the world’s top hoteliers and hospitality academics, this pioneering initiative is calling for gender equality across senior positions, in line with the UN’s Sustainable Development Goal 5.

Uniting industry leaders in a common goal

The LeadingHôtelières coalition has been founded by the CEO and president of HoteliersGuild, Frank M Pfaller, and co-founded by the CEO of Preferred Hotels & Resorts, Lindsey Ueberroth. Considerate Group’s Xenia zu Hohenlohe is leading the coalition as chairwoman in its inaugural year, and the associate professor of management at EHL, Dr Sowon Kim, is joining as co-chair.

“When we looked at our HG membership roster, we realised that we had far too few women in leadership positions,” said Pfaller. “Reaching out initially to Lindsey, Xenia and Sowon, we were thrilled to realise their enthusiasm to join our cause to making a real change.”

Additional support is being provided by industry leaders like the owner and CEO of Grand Hotel Tremezzo, Valentina de Santis; sustainability architect Yasmine Mahmoudieh; the director of Red Carnation Hotels, Vicki Tollman; the director of spa at Four Seasons Hong Kong, Dr Tania Bardhan; and the CEO of hospitality consultancy WE(i) Think, Celine Vadam. Each will play an important role in establishing greater gender balance at a systemic level. The group’s communication is to be coordinated by the managing director of Mason Rose, Maria Pajares.

An advisory board is now taking shape, with founder of ESPA International, Sue Harmsworth; associate professor at Institut Paul Bocuse, Dr Henri Kuokkanen; and professor at IUBH University of Applied Sciences, Dr Willy Legrand onboard to offer support.

Working towards gender balance

Together, these figures are setting plans in motion to encourage gender equality across the industry by providing guidance, mentorship and training through its network of industry contacts.

The focus for the coming year is on addressing flexible working structures. “I’m happy to see more women CEOs in hospitality, but we are still a far cry from where I hope we can be in terms of representation,” said Ueberroth. “The biggest challenges for women looking to achieve top leadership roles were the need to travel, relocate and dedicate long hours.

“In the past, once having children and raising a family came into the equation, many women were forced to make a choice, and those challenges were hard to overcome. Given the innovations in technology and a more open attitude towards flexible working hours and home offices, many of these hurdles seem alleviated.”

“We are currently working on a framework to test whether the outcome of our goal, to improve gender equality among directorial and operational roles in the hospitality industry through updated flexible working schemes, actually works for our hotelier partners,” added Dr Sowon Kim, who is heading up research for the initiative. “We aim to create new and relevant knowledge and share these findings in a meaningful, productive way.”

Xenia zu Hohenlohe concluded: “Gender equality is a key part of the UN’s Agenda 2030 for Sustainable Development and any business serious about futureproofing itself will need to address this issue.

“We have an incredible collection of women with highly professional profiles paired with great brainpower in this group, all driven by the motivation to ensure the female hotelier of the future will be able to finally have the same opportunities for career development as their male peers. I am delighted to be co-chairing this chapter with the wonderful Sowon Kim and we hope to be able to make a real difference with this work.”

Source: https://tophotel.news/new-coalition-to-fight-for-gender-equality-in-hospitality/

New CEO for Institute of Hospitality

The Institute of Hospitality, the professional body for current and aspiring managers working in hospitality, has appointed Robert Richardson as CEO.

Robert Richardson is to become CEO of the organisation as of 19 April 2021, succeeding Peter Ducker, who spent eight years in the role.  

A new chapter for the Institute of Hospitality

  Now taking the helm of this international professional body, Richardson will endeavour to build on Ducker’s legacy. Richardson was previously general manager of Cave Hotel in Kent and, prior to that, held the same post at The Grand in Folkestone, and was an active member of the institute’s advisory board.   The new CEO received the Institute of Hospitality Judges’ Award in 2018 for his commitment to the professional body, before in September 2020 being named Institute of Hospitality vice-chairman.  

Leading the industry forward

  In this influential role, Richardson will work closely with the Institute of Hospitality chair, Kellie Rixon, to lead the body in a post-pandemic world and help realise its aspiration to achieve chartered status.   “We could not be more thrilled to welcome Robert as our new CEO,” said Rixon. “We know he brings with him not only a wealth of hospitality industry experience and connections, but the respect of his peers in education and the wider community where he has dedicated so much of his time to raising the standards and stature of our amazing profession.”   “As hospitality returns to the forefront of our economy and our daily lives after a year of unprecedented disruption and challenge, there has never been a more important time for our industry to cultivate strong leadership and management skills,” added Richardson. “We also need to attract and inspire future generations of talent, and I believe the IoH is perfectly placed to help support this. It is a huge honour to step up and lead our institute moving forward into a brave new post-lockdown world.”

Source: https://tophotel.news/new-ceo-for-institute-of-hospitality/

Marriott Execs: Don’t Expect More Hotel Mega-Mergers Even in Covid Times

Major hotel companies are massive enough. Mergers and acquisitions departments need to think more about smaller, strategic deals rather than mega-takeovers that take tens of billions of dollars and years to integrate companies.

The airline industry’s last two decades of consolidation are no longer the blueprint analysts once saw as a foregone conclusion for hotel companies.

Hotel industry analysts expected massive rounds of industry consolidation due to the pandemic. Instead, hotel companies have focused more on conversions — deals centered around organic growth that involves the owner of an existing hotel to take on a new brand affiliation.

While mergers and acquisitions aren’t entirely off the table, Marriott leaders don’t expect a repeat performance of its $13 billion Starwood Hotels & Resorts takeover in the future.

“First of all, you need a big checkbook to get one done,” Timothy Grisius, the global mergers and acquisitions and real estate officer at Marriott International, said Monday at a reporter breakfast at the 2021 Americas Lodging Investment Summit in Los Angeles. “I think people are trying to keep their house in order today and make sure that they act in a financially disciplined way. There’s not a lot of need to grow even larger for a company like us. We do that organically and don’t necessarily need to buy additional brands.”

Hotel companies may analyze and pursue larger mergers and acquisitions, but there likely won’t be much traction, Grisius added.

The consolidation, or lack thereof, forecast comes amid a faster-than-expected recovery in the leisure sector. At the worst point of the pandemic, rumors revived about a potential Accor-IHG pairing as well as predictions smaller players like Wyndham Hotels & Resorts, Choice Hotels, and Extended Stay America were low-hanging fruit for global giants like Marriott and Hilton.

While Extended Stay America traded during the pandemic, its $6 billion joint takeover came from investment groups Blackstone and Starwood Capital rather than a competing hotel company.

“I think the biggest thing right now is the difference between buyer expectations and sellers,” said Leeny Oberg, Marriott’s chief financial officer. “You’ve got the reality that, depending on what kind of player you’re talking about, the bigger ones would be looking for kind of one-offs that can fill in a hole rather than needing to go and do very large kind of transformational deals.”

The buyer-seller price expectation disparity, along with various rounds of federal pandemic relief, played a major part in why there hasn’t been a massive wave of hotel transactions so far.

But smaller, regional acquisitions could complement organic brand growth. Accor has generally followed this trend in beefing up its U.S. footprint, adding brands like 21c Museum Hotels and SBE in recent years.

Smaller brands might get dissuaded from the hefty costs required to invest in technology infrastructure. That could be an added incentive that eventually drives some smaller, regional brands to consider a sale, Marriott CEO Anthony Capuano said.

Marriott already follows the trend. AC Hotels was concentrated in Spain when Marriott first partnered with the brand in 2011. Acquiring South Africa-based Protea Hotels in 2014 gave the company a significant presence in sub-Saharan Africa.

“You may see some of these smaller transactions that follow a pattern where we have a small regional player that allowed us to get a footprint in a market where we struggled to grow,” Capuano said.

But the industry shouldn’t necessarily gear up for a major wave of these deals, either.

“I think you’ll see some of that, but Leeny’s point about the gap between the bid and the ask may mute the volume of transactions,” Capuano added.

Source: https://skift.com/2021/07/27/marriott-execs-dont-expect-more-hotel-mega-mergers-even-in-covid-times/

International tourism is still struggling to recover

At the beginning of the second pandemic year, international tourism is not back to normal, as the virus is still circulating in various countries.

This is the first time since the beginning of modern tourism that a crisis has been so dramatic. Between the re-emergence of strict border’s laws and the interruption of almost every traffics in the world, it seemed that globalisation was no more.

Fortunately, this archaic way of thinking was quickly dropped and mutual assistance returned to an almost normal state.

Today, if traffics were partially resumed, tourism is still in a critical condition. From January to May, the UNWTO recorded a drop of 86% in the arrival of international travellers compared to the same period back in 2019, even if a small recovery in May 2021 can be noted, of the order of 4%.

This minimal one can be attributed to the easing of restricting measure in some countries. If we can hope for a reinforcement of this trend, variants and other variables has also to be put in consideration.

On a more cheerful note, local tourism tends to regain ground, especially in well developed markets such as Russia or America. Being unable to travel all around the world, people has restarted to visit their countries and contributed to the rebound of the industry, as money destined to go to other countries was spent in local markets. In Russia for example, seat capacity on domestic flights has already gone past the pre-pandemic level.

To conclude and as The UNWTO Secretary General Zurab Pololikashvili said: “Accelerating the pace of vaccinations around the world, ensuring effective coordination and communication of ever-changing travel restrictions, and promoting digital tools to facilitate mobility: all of these are essential to restore confidence in travel and getting tourism moving again.”

Source: https://hospitality-on.com/en/transport/international-tourism-still-struggling-recover

Almost half of all hospitality employees lost job in sector during last year

Almost half of all people employed in the Belgian hospitality sector during the first quarter of 2020 no longer have a job in this sector, according to the Federal Public Service Economy’s Labour Force Survey published on Tuesday.

The study compared the labour market status of the first quarter of last year when the pandemic started in Belgium with the first quarter of this year and found that, although most people are still in employment, the rate of employment has not recovered as well in all sectors.

“We see a particular effect among workers in hotels and restaurants: of those who were working in hotels and restaurants in the first quarter of 2020, only two-thirds are employed a year later,” the report read.

In the first quarter of 2021, the sector employed 40.4% fewer people than during the same period in 2020.

In comparison, employment in the arts, entertainment and recreation sector also dropped by around 10%. Only the Agriculture, forestry and fishing and ‘Human health and social work’ sectors had slightly higher job retention rates.

Meanwhile, in Brussels, businesses in the catering industry are finding it hard to fill vacancies, not because there are not enough people looking for a job in this sector – around 8,000 people are, according to Bruzz – but because jobseekers don’t have the relevant education or experience.

The number of job offers in the hotel and catering industry is at its highest since April, and the number of job-seekers in the sector has also remained high since March last year however a lack in experience as well as in the certainty such jobs offer during a pandemic is resulting in them remaining unfilled.

Job seekers’ struggle

When it comes to the impact on the unemployed, the study found that 44.9% of the job seekers in 2020 were unemployed (again) a year later, 29.1% have stopped looking or are no longer available for work and just 26% have found a job since.

The rate of continued unemployment varies between the French- and Flemish-speaking regions: in Flanders, 38.4% of the jobless remain unemployed, but another 38.6% found a job a year later.

In comparison, 48.6% remain unemployed and only 18.6% go back to work in Wallonia, whilst in Brussels, the rates are similar, with 48.7% people remaining jobless and 19.1% finding a job.

Young people and low-skilled people are particularly affected, as, respectively, only 80.2% and 77.4% of those who were employed at the start of 2020 were still employed in the first quarter of this year.

FPS Economy pointed out that making comparisons between the two periods when it comes to unemployment has become more complicated as the definition of employment changed in the new European Framework Regulation.

Now, people who have been temporarily unemployed for more than three months (‘long-term temporarily unemployed’) are considered unemployed or inactive, and no longer employed.

“In the first quarter of 2021, it is estimated that 80,000 long-term temporarily unemployed people will be counted as inactive (and to a lesser extent, unemployed),” the report explained.

Source: https://www.brusselstimes.com/news/belgium-all-news/employment/176455/almost-half-of-all-hospitality-employees-lost-job-in-sector-during-last-year/

Reintroducing Costly Hotel Brand Standards Threaten Owners Just Getting a Taste of Recovery

The U.S. hotel industry, buoyed by summer leisure travel, exceeded expectations in recent months and even surpassed pre-pandemic performance levels last week. But if another aspect of hotel operations quickly snaps back to normal, hotel owners could be in trouble.

Most hotel companies relaxed brand standards, which range from what kind of cereal to serve at a continental breakfast buffet all the way up to costly renovations of guest rooms and public spaces, during the pandemic as a way to help owners save money during a long stretch of minimal demand.

Should the U.S. hotel recovery momentum continue into the fall, enforcing brand standards are likely back on the table. That could spur a wave of long-awaited hotel property sales.

“It might be the looming capital expenditures and property improvement plans and lack of cash that might cause the capitulation,” said Alan Benjamin, founder and president of hotel furniture and equipment procurement firm Benjamin West.

The combination of more than a year of deferred maintenance and renovations combined with hotel companies looking to avoid bad reviews from travelers coming out of the pandemic will push capital expenditures to all-time highs between 2022 and 2024, West estimates.

The overwhelming demand stems from both hotels that put off these costs during the pandemic as well as from normal maintenance and renovation schedules from hotels that opened or were previously renovated in the last seven years. But some owners may not be able to afford to stick around long enough to go through a renovation cycle.

Hotel owners are typically expected to have cash reserves of 4 to 5 percent of gross revenue readily available for capital expenditures to keep up with brand standards. But owners got permission to tap into these reserves to stay afloat through the pandemic.

“For the first time ever, the lenders greenlit taking that money to hang on to control the asset,” Benjamin said.

Many analysts doubt these reserves have been restored over the last few months, especially in hotels outside leisure markets still struggling to recover. Revenue at U.S. urban hotels in May was still down 52 percent from the same month in 2019, the American Hotel & Lodging Association reported this week.

Eager investors have been salivating over pandemic-related opportunities and bargains to emerge from the hospitality sector, given its outsized impact from the health crisis. While some owners may not discount the pricing of their hotel, many could decide to sell instead of pump money into an asset after a year of tanked revenue and an uncertain recovery trajectory in the years ahead.

A Long-Simmering Debate

Owners and investors have decried brand standards for years over their perceived excessive costs and limited return on investment.

Starwood Capital spent $250 million on property improvement plans on a portfolio, and the investment firm’s CEO, Barry Sternlicht, claimed last year at the Saudi Arabian Ministry of Tourism’s Future Hospitality Summit the company didn’t gain any market share following the investment.

“If you own a Courtyard and it is number one in its [competitive] set, they’ll ask you to spend $7 million when it rebrands, and none of that money has been worthwhile,” he added. “It’s like throwing money in the ocean.”

Sternlicht and Starwood Capital are more in the camp of buy mode, but analysts think other owners could be in a more vulnerable position.

“Brand standard upgrades and renovations can either crush a hotel or help reposition it into a more desirable market ‘sweet spot,’” said Chekitan Dev, the Singapore Tourism Distinguished Professor at Cornell University and an expert on hospitality branding. “Bringing back a full set of pre-pandemic standards is going to be a hard sell for brands and a hard slog for owners who are trying to recover lost profits.”

There was already a pre-pandemic tension around brand standards issued from hotel companies to the owners responsible for paying for them. The brands want to add enhanced amenities and design with the hope more customers will choose their property instead of a competitor’s. Owners are typically more focused on reducing costs to boost profit.

Both stances are likely to continue during the pandemic recovery. Brands are likely to do what they can to differentiate a property in a more competitive market with limited travel demand — like urban markets the rely more on business travel — while owners will want to find efficiencies to save money.

Dev sees four options for hotel owners: revert to pre-pandemic brand standards, convert to a different brand with different standards, debrand entirely and become an independent hotel, or sell.

“Ultimately, the decision will be driven by a multitude of factors including the renovation cost per key vis a vis the ability to raise rate, the owner’s bargaining position with the brand, the brand’s desirability, the availability of alternate brands, the owner’s marketing and operating expertise, the availability of third-party management companies, the location of the hotel, and buyers for the hotel,” he added.

Solutions Beyond a Sale

Not every hotel owner necessarily needs to panic about a quick revert to the way things used to be with brand standards.

Hotel executives indicated in recent months there are at least some conversations around how to reintroduce these measures without breaking the bank for owners only just beginning to see occupancy rates on the rise.

“We are currently assessing post-COVID renovation of brand standards with a view toward finding more ways to improve hotel profitability while preserving the quality and experiences guests expect of our brands when they stay with us,” Leeny Oberg, chief financial officer at Marriott, said on the company’s first quarter earnings call before later adding: “We’ve got to make sure that we’re taking into consideration the dramatically lower cash reserves that the hotel owners have and picking our spots and making sure that we’re picking the renovation work that is critical to the customer experience.”

While she didn’t provide specifics, Oberg noted she expected the company to have a finalized approach on brand standards sometime next year.

For owners that are expected to snap back into costly renovations, there are other options. The Curator Hotel & Resort Collection launched last year aimed at appealing to hotel owners wanting a bit more autonomy than they would have associating with a bigger brand, including around brand standards.

Global hotel companies would be wise to note they aren’t the only option for owners coming out of the pandemic.

“Many brands permitted hotels to gut brand standard to help the hotels stay alive. The consequence of this is hotels that have learned to operate with a lot less and differently than they did before the pandemic,” Dev said. “To preserve the brand-hotel relationship, and to bring back the standards that define the brands’ reason for being, brands must draw on learnings from the pandemic and be creative to help hotels meet their standards.”

Source: https://skift.com/2021/07/09/reintroducing-costly-hotel-brand-standards-threaten-owners-just-getting-a-taste-of-recovery/

Digital Tools to Revitalize Tourism

The World Tourism Organization (UNWTO) continues to energize the restart of tourism based on sustainability and innovation. An agreement with MUST Travel & Tech places a digital tool at the service of tourism, allowing users to share their experiences to promote the reactivation of the sector with a view to sustainability. Presented during the UNWTO Mayors’ Forum in Porto, Portugal, the tool is an opportunity for the advancement of smart cities, as well as destinations that incorporate technology and innovation in their development.

Already operating in 60 countries, MUST aggregates all the information of interest to travellers in one place. By also integrating key information and analysis from UNWTO, it aims to become a leading tourism application and generate opportunities for destinations.

Technology at the service of development

We welcome innovative ideas and technologies that allow the creation of global and regional innovation ecosystems aimed at accelerating the recovery of tourism for development

Visibility provided through technological tools is an opportunity for those who, along the entire value chain of the sector, require support to restart their activity, from new destinations around rural communities, to destinations with a high degree of infrastructure development.

“We welcome innovative ideas and technologies that allow the creation of global and regional innovation ecosystems aimed at accelerating the recovery of tourism for development,” said UNWTO Secretary-General Zurab Pololikashvili upon signing the agreement.

For his part, the CEO of MUST, Pablo López, highlighted that “technology enhances the productivity and resilience of companies. The implementation of digital solutions in line with new trends in the tourism sector allows us to develop a differentiated, personalized and safe tourism product that is more focused on behaviour patterns and the management of spaces that will undoubtedly contribute to the recovery of a key activity for the economy in general”.

Shared objectives

A distinctive element will be the contribution of tourism intelligence from the UNWTO to the users of the tool. In this way, relevant and verified content is combined with data for making informed and evidence-based decisions.

The agreement provides for cooperation in the execution of projects that include, among others:

  • Supporting the digital transformation of tourism service providers.
  • Fostering tourism development and promotion in a sustainable and inclusive way.
  • Boosting innovation in the practices of reservation and consumption of tourism experiences and activities.
  • Encouraging the creation of quality content with a focus on cultural heritage and the authenticity of the destination to be promoted.
  • Promoting and disseminate the UNWTO “Best Tourism Villages” programme on the MUST platform as well as other programmes or events of the Organization.
  • Promoting programmes related to innovation, education and investments that are useful for tourism destinations of mutual interest.

The agreement between UNWTO and MUST will be in place until the end of 2024.

Logos, product and company names mentioned are the property of their respective owners.

Source: https://www.hotelnewsresource.com/article116476.html

Gender Diversity At The Top Of The Ladder: Will Hope Become Reality?

Universities are educating more and more women

Education is a major factor enhancing development and quality of life. As highlighted by the United Nations, it has become a priority in international development goals. In recent decades, the share of young adults (25-34 year-olds) reaching tertiary education [1] across all OECD countries increased to 44%, which is significantly higher than the 27% for their 55-64 year-old counterparts (OECD, 2019). In Switzerland, 53% of young adults had a college degree in 2019, while this figure was as low as 26% in 2000. In an increasingly competitive world, education works as one of the main signaling systems for individuals (if you manage to get a high enough GPA from a respected university, you are signaling to future employers that you might have some valuable skills). Yet education remains flush with inequity, and the increase in educational attainment is more pronounced for certain categories of the population.

For example, did you know that in almost all OECD countries, more women attend college than men? If you’ve had the chance to visit a university campus recently, you might have noticed. A concrete example is EHL, one of the leading hospitality management schools in the world based in Switzerland, where 59% of bachelor students are women. This figure is in line with recent OECD data showing that 57% of young adults with a university degree are women, versus 51% for 55-64 year-olds (OECD 2019, Education at a Glance Database).

Many female college grads don’t make it to the top of the ladder

Overall, statistics show that universities are educating more and more women, with most majoring in business administration studies [2]. Logically, the proportion of women in top management positions – especially finance-related ones – should reflect this general trend … but this is where the figures don’t exactly add up.

In the European Union in 2019, women accounted for 28% of publicly-listed companies’ board members and only 18% of executives, versus 15% and 10% in 2012 (Eurostat, 2019). In other words, the trend is positive, but most female college grads don’t make it to the top of the ladder. Moreover, significant heterogeneity remains across countries, and large changes occurred predominantly in countries that voted quotas into law. Finally, women have easier access to management positions in certain industries. For example, 33% of senior top managers in the hospitality industry in 2015 were women, slightly below education (41%) and healthcare (41%), which contrasts with construction and real estate (18%) and mining and quarrying (12%) (Statista).

Men and women make decisions differently

Things are starting to change, albeit slowly, and gender diversity has become a central concern from a social, political, and governance point of view. Given the current overall positive trend showing that women are more present in boards and executive committees, it is important to understand the consequences of having more women in high-skilled financial positions. Indeed, gender diversity might bring diverse experiences, perspectives and incentives into the discussion and improve the decisions that are made.

The literature documents that gender-based differences include behavioural aspects in terms of planning, decision-making, risk tolerance, and overconfidence (Ittonen and Peni, 2012; Khlif and Achek, 2017). Indeed, men and women make decisions differently (Lee et al., 2019) and female top managers tend to be more diligent and conservative, less overconfident, and more risk averse.

Much-needed research is on the way

To understand the consequences of increasing gender diversity in high-skilled financial/accounting positions, researchers from EHL and Grenoble Alpes University are currently working on a project investigating Swiss publicly-listed companies. The goal is to analyse how audit quality is impacted by the interplay of women in the auditor-auditee relationship. Descriptive data show that, between 2010 and 2017, the percentage of audit committees (a committee composed of board members in charge of the oversight of the financial reporting process) with at least one woman increased from 13% to 39%.

Regarding audit reports, it appears that they were signed by at least one female auditor in 26% of the cases in 2010, and 35% of the cases in 2017. These increasing trends are important factors that might impact the negotiation and the relationship between the auditor and the client, the auditing process itself, and the subsequent accounting information quality. For instance, several studies document that women audit partners provide higher quality audits in Finland, Sweden and the UK (Ittonen et al., 2013; Cameran et al., 2017), and that female directors are more effective in dealing with complex audit tasks and judgments (Chung and Monroe 2001; O’Donnell and Johnson 2001; Neidermeyer et al., 2003; Lee et al., 2019).

The results of the study will be released soon. For the moment, however, the figures tell us that women are becoming increasingly present in high-skilled financial functions although there is still a long way to go to reach parity.

[1]Tertiary education is defined by the World Bank as “including both public and private universities, colleges, technical training institutes, and vocational schools.”
[2]Most tertiary-educated people have a degree in business administration or law (25%), while less than 5% have a degree in information technology, natural sciences, mathematics, or statistics (OECD, 2019).
[3] Castell Research Project
[4]Data covering 31 US publicly-listed firms.

Source: Poretti, C. (2021) | Hospitality Net: https://www.hospitalitynet.org/opinion/4103539.html

Covid-19: Hoteliers Review Their Human Resources Strategies

Major hotel chains are reducing their workforce.  The business is performing 50% below normal levels in the European market and Asia Pacific, excluding China [iii] ; Marriott’s CEO Arne Sorenson said that the hotel business was running almost 75% below normal levels. This is the reason behind Marriott’s decision to cut off two-thirds of its 4,000 corporate employees at the Bethesda, Maryland head office, which means approximately two-thirds of corporate staff abroad will also be furloughed.

All the way down to the hotel operation level, the international brands are facing the critical issue of redundancy during this current COVID-19 crisis, regardless of each owner’s specific cash flow situation.

GAS HR

What are your underlying drivers for retention or downsizing strategies?

This article will navigate through the upsides and the downsides of these two strategies: Retention or downsizing. We will provide you with examples and reflections that you may find useful to evaluate your best actions.

The underlying variables of the post-COVID-19 business plan are related to economic and governmental policies, and they are not consistent worldwide. Therefore, in this document, we are not going to provide our opinion nor recommendations. Nevertheless, our hotel asset management team can provide best practices and adapted approaches to each particular hotel.

STRATEGY ONE: TO AVOID COVID-19 LAYOFFS

PRO “ Instilling Loyalty Among Your Staff”

The corporate value of international hotel brands includes the relevant element of employee caring. For example, Marriott states that they put people first and their value is “Take care of our associates and they will take care of our customers.” Besides the written contract, the hotel chains have built psychological contracts with their employee that create unwritten expectations in the employment relationship.

As such, the handling of employee-related issues would determine if the psychological contract is perceived as being kept or breached. The breach can severely damage the motivation and performance of the staff.

In this hyper-connected world, information about mishandling labour-related issues could be quickly propagated and damage the employer branding of the hotel chains. However, it could be an opportunity for hotel chains to show that they care for the well-being of their employees. For instance, Hilton has announced that it will team up with 30 leading companies to provide temporary jobs, in addition to the common practice of covering health benefits. Furthermore, Accor will allocate EUR 70 million in a fund to cover those employees without medical insurance or social security that present COVID-19 health issues and to support front-line healthcare professionals & non-profit organizations. The fund has been raised from the unpaid year 2019 dividends.

The determination to maintain a positive attitude towards staff-caring and experience throughout the crisis is crucial for the recovery phase. There is no doubt that the different hotel brands will restart the competition for the talents in the industry once the market starts to recover. Good employer branding can be a competitive edge. Besides employees do not forget when you support them during tough periods.

CON “Adding Substantial Pressure to Your Cash flow”

When occupancy is plummeting to single digits, cash flow management becomes the lifeline of nearly all the hotels. As labour costs, regardless of the hotel category, generally represent the largest component of operational expenses, multiple hotel chains including Marriott, Hilton, Hyatt, Accor and MGM have announced furloughing schemes as a component of their COVID-19 responses in order to slash costs.  Furthermore, these hotel chains have also declared a different degree of pay cuts for the remaining employees. For example, CEOs put a halt to cash dividends and reduced salaries to senior executive teams by 50% [iv].

The cost-saving exercise should be conducted in a way that allows the hotel to recover quickly once the demand comes back. A salary cut policy is required at every level to survive; in other words, we all need to tighten our belts until the ramp-up stage.

The significance is that, if the termination of the employment contract is not an option, some businesses may be only left with one choice: a total shut down. When planning different financial scenarios, it is essential to manage the working capital for the short term and medium term. Owners need to start pro-active discussions with their banks or other investors to increase their debt service, (we have published another article specifically on this topic).

On 28th March, the Wujiang Hotel Chain, an emerging hotel chain that was formed under the investment of C-trip last year, was the first hotel chain to collapse in this crisis. Xiaodong Ma, the CEO of this hotel chain, has announced they will terminate all employment contracts by 30th April [v] . There is no doubt that the ban on unilateral termination of employment contracts in China during the lockdown has greatly contributed to the downfall of this one-year-old hotel chain [vi].

STRATEGY 2: TO EXECUTE COVID-19 LAYOFFS

PRO “Team optimisation and transformation”

The drastic drop in business has forced many hotels into a minimum level of operation. At the same time, the crisis has made it easier for the operators to identify who are the core staff and who are the weaker team players. We all know that layoffs are necessary and that they open up an opportunity to review the organization to optimize productivity, reduce long term costs and often improve the overall operation/guest experience.

In addition, the Human Resources department should optimize the workforce according to several variables that will impact the labour cost structure:

  • Adjust the business plan with several tentative re-opening dates.
  • Adapt the workforce to different ramp-up occupancy levels.
  • Reorganize F&B team to the gradual opening of the various outlets (the same applies to other operating departments).
  • The well-being of employees: Motivate, train (e.g., new hygiene procedures) and reassure the team after this challenging period.

CON “Consideration of recruitment & re-training costs, and reputation”

As China’s economy is slowly shifting towards recovery mode, many labour-intensive companies, including hotels, have found themselves short of workforce. The reason for this labour shortage varies; but one of the reasons was that some employees were reluctant to return for fear of infection.

Since 2016, many industry analysts have been expressing concerns over a labour shortage at all levels, especially in the operational departments. This phenomenon is highly detrimental to the industry, as hotels’ operation requires a set of expertise in every department. The labour shortage can be statistically proven by the increasing labour cost percentage at hotels.

Also, other than payroll, there is a key factor that justifies the value of raising the labour costs: Training. When hotel management executes a training plan for different levels of staff, the costs included in this are training materials, supplies, certification programs and instructor fees. A thorough training will have a direct positive impact on productivity, customer satisfaction, revenue growth through upselling and enhance employee satisfaction that leads to lower turnover.

It is logical to interpret similar situations that would occur in other sectors in the recovery phase; keeping the current staff may be a sound strategy for minimizing the cost of rehiring. As hotels in China rely on the domestic labour force, it can be estimated that the increase in hiring cost after the crisis can be even steeper for countries which are mainly relying on foreign labour. 

Last but not least, owners and operators should consider that downsizing has a reputational risk, especially if the crisis is short. Before making any decision, it is important to consider the following: What are the hotels core values? How do owners and operators want to be recognized in the market? How will this impact in the recovery period? 

The list of pros and cons of each strategy seems to be limitless and we are only listing out the general considerations. As such, please do not hesitate to share with us your thoughts and considerations on your staff retention and downsizing strategies.

Source: EHL Insight | https://hospitalityinsights.ehl.edu/hoteliers-human-resources-strategies