The annual report examined staffing, budgeting, outsourcing and broad investment priorities at the enterprise and hotel levels.
Many travel and hospitality organizations are using today’s reality to further strategic pivots and accelerate investments in digital and infrastructure technologies. Technology vendors used 2021 to refocus their products and logical consolidations broadened existing platform offerings.
While recovery won’t be a linear event as we move into 2022, there are three key pillars that will continue to impact the pace and direction of industry recovery: Macroeconomic Issues, Market Mix, and Agility.
Going into 2022, there is reason for optimism. In the 2021 Spend Survey, 54% of respondents described their approach to the coming year as “cautious”. Going into 2022, 51% of respondents report feeling various degrees of optimism ranging from “highly optimistic” to “cautiously optimistic”. The timetable for stamping out the pandemic is unknown, but the endpoint remains the same: the world needs to adjust to managing COVID-19 as an endemic disease.
Budgeting Processes & Spending Plans
Given the backdrop of the pandemic and all the changes that have occurred which have impacted the industry, the 2022 Hospitality Upgrade survey asked if respondents planned to spend more, less or about the same on technology in 2022 compared to 2021.
And the survey says: A whopping 62% of respondents report that they plan to spend more in 2022 than in 2021. This represents a 39% increase in those who plan to increase spend in 2022. It is worth noting that 0% of companies anticipate spending less, while 38% of companies plan on spending roughly the same amount. The takeaway for 2022 is that companies are approaching spend with optimism for market recovery.
OVERALL SPEND
2020, 2021, 2022
Companies are now more agile with an overwhelming 91% of respondents stating that strategic investment priorities and timelines adjusted rapidly to accommodate rapidly changing market conditions during 2021. 24% of respondents state that a portion of their budget was diverted to pay for pandemic-related items. The most prevalent of these expenses supported hardware/software for remote users, contactless check-in for guests and payroll/operational expenses.
In this year’s survey, Hospitality Upgrade asked respondents to describe how their organization approached budgeting for IT expenditures. For 2022, the most common method (40% of hotel companies in the sample) is to create a separate budget for Corporate and a single budget for all hotels. The other two budgeting methods, Enterprise Budgeting and separate Corporate/Individual Hotel budgeting tied at 30% each.
The 2021 and 2022 numbers are virtually identical as the survey respondents both years reported having the majority of their properties, 51%, identified as “Branded Full Service” properties.
The Report Summary
The annual report represents the findings of a survey of leading CIOs representing more than 25,000 hotels and approximately 2.1 million rooms. The study examined staffing, budgeting, outsourcing and broad investment priorities at the enterprise and hotel levels. The report then drilled down to focus on the changes introduced by the COVID-19 pandemic; its impact on 2021, its projected impact on 2022 and beyond, and how that anticipated impact shifted investment priorities.
Following are the Top 5 takeaways from the 2022 survey:
Attracting/Retaining Talent: A full 81% of this year’s survey respondents report difficulty in hiring and retaining staff. The No. 1 issue encountered by 71% respondents in the new hire process is finding qualified candidates. While the No. 1 issue cited by 32% of respondents relative to retention is offering competitive salary/benefits.
The smartest companies are positioning themselves to attract a pool of global talent in an ever more competitive environment, embracing the opportunities and challenges that come along with it. While Skift and the Boston Consulting Group (BCG) note that travel demand is again surging, operators recognize that a recovery is likely to be volatile.
The travel industry’s embrace of digital technologies and innovation is driving an increasing need for expertise in these fields. Additionally, the benefits that the global hospitality industry offers, and have been innovating to become more competitive, will help attract and retain talent. Businesses that understand how to appeal to this emerging labor base through new working models and the right culture and values will find themselves well ahead of the game for 2022 and beyond.
Digital Transformation: The COVID-19 pandemic in 2020 was a digital wake-up call for the hospitality industry, placing new demands on companies across the industry and creating an urgent need for solutions to address them according to a study published by Skift and Amazon Web Services (AWS). Travelers demanded more online shopping options, digital communications, and contactless solutions, forcing companies to adapt how they served customers. Meanwhile, behind the scenes, organizations had to design new ways of working as employees shifted to remote work using new digital collaboration tools to stay productive. On top of all this, organizations across the industry dealt with new challenges to their business models, including unanticipated changes in consumer demand, new distribution strategies, and rapid experimentation with new products and services.
Security: Investment in Information Security is the No. 1 investment priority for the fourth year in a row. Businesses must be prepared to repulse attacks and mitigate the impacts of successful breaches. Private industry might take a cue from government information warfare preparedness training and create simulated environments for their teams to practice and enhance their skills, increasing the likelihood of successfully resisting an attack.
Doing More with Less: Doing more with less is a recurring theme from 2021 to 2022. The takeaway for 2022 is that companies are approaching spend with optimism for market recovery; making up for lost investment time to maintain competitive advantage and meet changing guest and employee expectations. Sounds great, right? The catch is that investment must be done with an eye toward efficiency, digitalizing tasks, where possible, without sacrificing service. This is a clear response to the Great Resignation of 2021, which dramatically reduced the number of corporate and on-property employees, creating the need to rapidly do more with fewer staff.
Traditional Investment Continues: Many core, on property systems, are aging out functionally and the on-premise model offered by legacy systems does allow companies to take advantage of the benefits of Cloud economics, reliability, scalability and security.
