Skift Travel News Blog

The relationship between the owners and operators of hotels has traditionally been fraught because the two sides often have goals and philosophies that don’t fully overlap. The pandemic forced operators to align closely with operators in a battle to survive the plunge in demand. Working closely together, ties between the two sides warmed up. The post-pandemic boom in demand has boosted moods, too.

Yet as time goes on, the relationship between owners and operators faces the old strains once again.

Many operators, for example, are eager to return to pre-pandemic employment levels. They’ve been exhausted by rounds of layoffs and having had reduced staff to cope with a surge in demand. Yet operators — keeping their eye on operating margins as inflation rises — want to hold the line on budgets. At many properties, 85 percent is the new 100 percent when it comes to staffing.

As Skift’s senior hospitality editor, I recently chatted about this evolving relationship with Robin Trimingham, host of The Innovative Hotelier Podcast by Hotels Magazine. We talked about how economic uncertainty, pressure on independent hotels from global brands, and technology changes are stressing owner-operator relationships. We also talked optimistically about how a new cooperation model could enable hotel companies to thrive.

Operating performance at many hotels worldwide is getting closer to pre-pandemic levels, according to a Hotels Global Asset Management Report released on Tuesday by JLL Hotels & Hospitality — an investment advisory firm that helps manage more than $6.8 billion in hotel assets.

A few charts from JLL’s report stand out.

Inflation has been rising in much of the world, but hotels have been able to pass along higher rates to customers to keep nearly in sync.

Hotels have been able to keep up even though many have ramped up their capital expenditures on furniture, furnishings, and property upkeep, as this chart suggests:

Can hotels sustain the momentum and continue to price well to cover inflationary pressures? It’s possible. Levels of business travel, especially international and long-haul business travel, remain quite low relative to 2019 levels in many markets. Even in a downturn, companies want to fight for market share by sending colleagues out into the field to close deals. So there may be more room for growth, as this chart suggests:

On Monday Skift published an interview with a top JLL executive, Andrea Grigg, to learn what she’s been hearing in 2023 budgeting sessions at hotels worldwide. Grigg summarized that forecasts are broadly and cautiously optimistic. But she noted that too many hoteliers are trying to restaff to 2019 levels when that often won’t be the route to profitability. Getting better at upselling and cross-selling is a key priority for hotels next year, she said.

JLL’s Hotels Global Asset Management Report is embedded below and is available on JLL’s site.