By Ryan Hamilton
After the year that was 2020, 2021 seems to be a period defined by cautious optimism. A world on the precipice of a long-awaited reopening, with a predicted surge of social and economic activity ready to shift our respective communities from the ‘new’ normal to the normal we once knew. The desire for this return is palpable and warranted, but we must acknowledge that much still remains uncertain in that same breath. Our attention is fixed on the future, but what does that future hold from an economic perspective? More importantly, what is the most fiscal path forward for businesses – especially those in sectors that were severely shuttered by the pandemic, like hospitality?
If we’ve learned anything over the last 17 months, it’s this – even at the best of times, businesses must have the foresight to proactively protect their bottom line. A good business plan recognizes that anything can happen and, with that in mind, focuses on long-term stability. In the wake of industry-wide closures that spanned months at a time, hoteliers around the globe learned this lesson the hard way. Hotel brands, both big and small, could no longer rely on a steady barrage of incoming guests and their associated spend; instead, they had to work quickly to diversify their revenue streams and identify any and all cost-saving opportunities.
As the hospitality industry moves to embrace the post-pandemic landscape, it is more important than ever before for hotels and venue spaces to recognize that the world is more fragile than it used to be. Our cautious optimism is justified, but it should be precisely that – cautious. In this environment, controlled spending is the integral key to fiscal sustainability and long-awaited recovery.
The Post-Pandemic Economy: The Good and the Bad
Over the last few months, we’ve seen no shortage of headlines splashed across media outlets indicating that the post-pandemic economy has arrived. The messaging is relatively straightforward and idealistic; COVID-19 won’t last forever, and GDP and consumer spending are on the rise. Many have surmised that the next year will reflect the economic enthusiasm of the roaring twenties, with corporate earnings on an upward trajectory and a notable consumer appreciation for experiences and travel.
While these predictions are welcome news for hoteliers and the hospitality industry at large, it’s important to remember that the economy’s path continues to depend on the course of the virus. Beyond that, we must also brace for inevitable economic challenges associated with high unemployment rates and post-pandemic inflation. To this effect, as of February, about 10 million people remain unemployed in the U.S., and the Pew Research Center reported in March that the global middle class likely lost 54 million people while the ranks of the poor grew by 131 million.
Now for the good news: Americans are reportedly wealthier than ever, likely due largely to the restrictions that limited consumer spending over the last year. In March of this year, U.S. household wealth jumped to a record $136.9 trillion. According to the report, rising equity markets drove the overall increase in wealth, adding $3.2 trillion to household assets in the first quarter. Rising real estate values added around $1 trillion. This spending capacity will be undeniably influential in the recovery of the hospitality industry, as households around the world book trips for both leisure and pleasure in the coming months.
The Importance of Long-term Controlled Spending
Often, we associate budgeting with restrictions and limitations, but, in reality, controlled spending simply mitigates the risk of overspending and enables hoteliers to make the most of their budget while protecting their bottom line. Effective spend management helps hoteliers and their employees reduce inefficiencies, streamline operations, maximize budget and increase profits. As the famous adage reads, “You can’t manage what you can’t measure” and, in the realm of fiscal sustainability, hoteliers can’t protect their bottom line if they don’t have a clear picture of how their money is being spent and, more importantly, where they can control that spend. When a hotel has complete control over its spending, they are set up for success both now and in the future.
This is an important consideration for hoteliers, as the hospitality industry is notorious for its reliance on outdated, legacy technology. Not only are these platforms often inefficient and subject to data silos, but they are also notably costly and rife with unnecessary expense and overlapping functionality. Switching to next-generation, cloud-based technology helps hotels keep their processes organized and secure, while a lean, all-in-one technological infrastructure helps hoteliers reduce operational spend. The best part? Integrated sales and catering technology doesn’t have to be a substantial expense. Salesandcatering.com’s STS Cloud is an all-in-one software solution that empowers hoteliers to save time, increase sales, simplify workflows, and optimize operations with advanced reporting – all for a fraction of the cost of similar platforms. Our simple, powerful sales and catering system includes unlimited users, training, 24/7 support, system maintenance, and more for one flat monthly fee.
Hoteliers, the writing is on the wall: It’s time to prioritize controlled spending, and you can start by optimizing your technology stack. Controlling your spending isn’t a short-term strategy; it’s the long-term strategy needed to protect your bottom line and solidify your path to recovery.