The Effects of a Slowing Economy to Resorts and Hotels

With the recession, businesses such as resorts and hotels are also in for a downturn. The slowing of the economy really has a strong effect on all business endeavors. And bad hotel business is also bad for employees. If they are not laid off, they are forced to go on leave, or suffer lower compensations for their work outputs.

Business and leisure travelers can expect a lot of things because of this recession. There will be changes, of course, and these are discussed in more detail below.

Services that Suffer
Of course, the best way for these hotels to save money is to cut down on budget, particularly on wages. Amongst all the staff of a hotel, it is the middle managers initially laid off, because their absence is not noticed by the guests.

Next in line would be the “high touch” front line employees like housekeepers, room service attendants and front desk clerks. These will leave hotels with skeleton crews where guests can already notice the decrease of services. This can be apparent when you find yourself waiting in line for 30 minutes already just to be able to check in or when the food you ordered takes more than an hour to reach your room.

Aside from the staff, administrative assistants at the hotel’s corporate offices can also lose their job. With this, you can expect that your letters of complaint about the long line you had to endure just to check in will also take decades to be read, more so, to receive feedback.
The Beginning of Outsourcing

With outsourcing, resorts and hotels will be able to save money. This is mostly with security housekeeping, beverage and food services. Although you can find outsourced staff that are very efficient, most of them are not well trained and do not comply with some of the hotel’s standards. More often than not, this can lead to poor services for the hotel or resort’s customers.

Having a Facelift
This is the time when hotels delay their expansion plans, mostly because their investors are not pouring money on their projects anymore. However, if the existing hotels are already experiencing a low occupancy rate, it is the perfect time for refurbishments. Empty floors and rooms can be completely shut down to have easy and quick remodeling projects. Empty parking lots can also be re-paved. With the lack of houses to build, contractors can offer hotels their services cheap.

Finding Lower Rates
Most travelers think that these hotels will substantially drop their rates just to draw in a lot of customers in these slow periods. This may not be the case. Instead, these hotels will come up with special promotions and packages with the rates not really going down. With the lower rate of revenue, they will just book a lot of extra room night packages. This means that with the bills these hotels need to pay, they will just look for people who are up in paying their regular rates rather than lowering their rates continuously.

Looking for New Segments
A “Market Segment” is a term used by hotels to refer to a group of individuals that hotels court and try to cater to. Most downtown hotels would go after business traveler market segments while beachside resorts would go for family market segments. This means that hotels will look for people who are still spending enough money.

Cutting Down Costs by “Going Green”
Since most of the expectations here can happen real soon, stuff like turning off the lights, doing less of the laundry and turning up thermostat temperatures on common areas are ways to reduce a hotel’s costs. Even if these are efforts to save money, press releases will indicate otherwise. It is their “contribution to the environment” by becoming an “environmentally-friendly” hotel.