Research from Ernst & Young and NYU sees challenges from interest rates and labor >>
Nearly half of hospitality industry CFOs expect the key driver of growth in revenue per available room (RevPAR) in 2023 to be a combination of average daily rate (ADR) and occupancy, according to a survey of CFOs from 30 leading travel and hospitality companies done by Ernst & Young (EY) and the NYIU School of Special Studies, Jonathan M. Tisch Center of Hospitality.
Bruno Eeckels, clinical associate professor at NYU and a contributor to the report, said the three top concerns for senior management are interest rates, looming recession fears and the state of the hospitality labor market.
Sean Hennessey, associate professor at NYU and a contributor to the report, added, “Although recessionary fears and unfavorable interest rates may dampen transaction activity, survey respondents remained confident that the improving operational trends will sustain the lodging sector’s trend of profit improvement.”
The survey found that companies are implementing a number of strategies to mitigate the impact of challenges, including:
35% of respondents say they are raising pay to attract talent.
20% say they are going to have a greater reliance on technology.
20% say they are going to adjust the amenities offered to customers.
Every respondent said hotel companies will reinstitute all brand standards, including requirements to complete deferred capital expenditures, by 2025.Those standards were relaxed during the pandemic.