The Key to Overcoming Rising Costs and Labor Shortages in the Hotel Industry

• The hotel industry is grappling with rising costs and labor shortages, and leaders are advocating for more technological innovation and investment to tackle these issues.
• Despite the challenges, industry leaders remain optimistic about the potential of technology, particularly artificial intelligence, to improve operational efficiency and investment strategy.

The hotel industry is facing ever-increasing costs and labor shortages that are not likely to disappear anytime soon. According to industry leaders, the solution is a greater focus on technological innovation and investment. During a recent session titled “Boardroom Outlook: Vision and Leadership,” Greg Friedman, CEO of Peachtree Group, underscored the need for technology-based solutions to pressing issues such as labor scarcity.

Friedman emphasized the need to explore different ways of enhancing operational efficiency through technology, both at the property and corporate levels. However, he acknowledged the absence of a single solution capable of significantly transforming operating costs.

Echoing Friedman’s sentiments, Mit Shah, CEO of Noble Investment Group, highlighted the need for major brand companies to lead the call for innovation. Shah further emphasized the role of technology in enhancing guest experience, reducing costs, and acquiring talent, acknowledging that these responsibilities should be a collective industry effort.

The COVID-19 pandemic forced the hotel industry to adapt and evolve, notably in terms of labor and demand. John Murray, CEO of Sonesta International Hotels, stressed the importance of keeping an eye on emerging tech innovations to improve hotel operations’ efficiency. He highlighted the need to ensure the adoption and use of new platforms on properties while maintaining data security.

Despite the challenges posed by the rapid pace of technological change, Friedman remained optimistic about the potential of artificial intelligence (AI) in the industry. He encouraged hotel brands to invest significantly in AI and figure out its best application for improving efficiency on both the operational and investment sides.

The winners in the hotel industry, according to Shah, will be those brands that can effectively leverage technological innovation for the benefit of all stakeholders, including customers and owners. He asserted that this transformation would require leadership from outside the industry, with fresh perspectives and approaches.

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