Almost all industries are experiencing challenges during the COVID-19 pandemic. This is especially true for the hospitality industry. According to the American Hotel & Lodging Association, U.S. hotels have already lost more than $18 billion in room revenue since the public health crisis began in mid-February. and are on pace to lose another $500,000 per day if current occupancy rates hold.
Currently, the hospitality industry is facing a number of significant issues:
• Leisure and hospitality industry saw the largest one-month decline in payroll
• The loss of some 4 million jobs as the crisis drags on
• 70 percent of direct hotel employees laid off or furloughed
• More than $2.4 billion in earnings lost each week by hotel workers
• Occupancies expected below 20 percent for upcoming months, putting 33,000 small business at immediate risk
While these statistics seem altogether negative, more hotels are being used for altruistic purposes, including hosting front-line workers and those affected by the pandemic. As such, local procurement officials are ramping up and expanding hotel room procurement rules in all parts of the country.
Under normal circumstances, the hospitality industry plays a huge role in the U.S. economy by employing a large workforce across the U.S. This economic uncertainty is forcing companies to reinvent themselves. A strong human capital management strategy can be the key to improving cross-organizational agility and success in the hospitality industry. Aligning talent with procurement and overall business strategies will help create a more cost-effective and value-driven organization.
Embracing agile procurement (or a flexible procurement strategy) is important to successfully supporting those most impacted by COVID-19. From a hospitality standpoint, there needs to be a better workforce system in place to help employees move swiftly and efficiently across the organization to create the biggest impact and help those in need—like healthcare workers and those without shelter. That means it’s imperative to have properly trained and highly skilled talent that can be easily sourced to bring accessibility, flexibility and transparency to organizations.
Research from The Hackett Group shows a skills gap is one of the top 10 issues facing procurement in 2020: “Organizations increasingly understand the need for top talent. For procurement, this means leveraging cross-training and investing in developing talent.”
Now more than ever, hospitality organizations need workers trained in both hard and soft skills to align with their business objectives. From individuals who are strategic thinkers with business acumen to those with analytic decision-making skills and technology savviness, procurement teams—specifically in the hospitality industry—need to invest in people who can create rapid change.
Soft skills such as communication, transparency and empathy are crucial for the hospitality industry to mitigate its losses and help conquer this global challenge. Leaders need to strategically align and mobilize their organization with agility to successfully navigate the new normal of the industry. Investing in modern technologies can help leaders make decisions that create quantifiable value, like effectively training employees to adapt to the new normal.
John Orr is SVP of retail strategy and execution at Ceridian.