Despite all, city centres are seeing stronger densities return. When will we really start to see a recovery?

As discussions run on about all needing to expect a further challenging six months, the question has been asked as to when the industry can start to see a period of genuine recovery. What is the expectation?

In discussions with operators, most are hopeful that we start to see recovery as of mid-2023, with 2024 being a year which brings back calmer waters where all can start to breathe easier. The feedback from sectors do vary quite considerably:

• City centre hoteliers are the most confident in their perspective having enjoyed a strong summer in 2022. The overall view is that there will be a challenging six months ahead but as of the spring, a sustained recovery will be seen.
• The food service sector feels more hesitant with many noting that revenues have recovered back to 80% of 2019 levels but also noting that workplaces are still only back to 45% levels. In 2020, many had believed it would be back to 70% in 2021; so one can understand the level of hesitancy as it has been a long journey.
• The good news is density numbers are returning to city centres and almost despite all the uncertainties swirling around the economy, it does seem that city centres are beginning to buzz once again.
• It is knocking onto restaurants where there are mixed reports emerging. It is still believed that there will be some serious levels of casualties but the increase in density levels do offer hope.
• It is viewed that the Meetings & Events market will be back to full recovery in 2023. Demand is increasing and confidence is returning to venues.

Altogether, it does all point to a recovery to emerge post mid 2023 but all experts note that there are a whole number of concerning winds which could easily disrupt the hopes. However, many are placing hope that the increase in density numbers will build a confidence which will allow for a more robust response to all challenges.

It is so well documented that all have faced the roughest of challenges over the last three years but many boards will note that maybe their biggest challenge has lain within their own teams. It has shown those who have stood up against each crisis and those who have hidden away. In private moments, many leaders have noted both their disappointment with many middle management and also their pride in how front line teams have performed. There is little doubt that much will have been learnt from the last few years.

When one asks what the key priorities are over the next few months, the answer has been very consistent:

• Labour and talent; the need to develop new strategies to recruit and retain the best talent.
• Inflation, interest rates, cash management and the economy.
• The need to develop new strategies to meet the expectations for guests and clients. People are paying higher rates but the industry needs to offer stronger service. Many accept that things have changed and there are new questions which do need answering:
  • In hotels, how will services be developed and evolved?
  • In workplaces, what will be the experience which does bring people back?
  • In restaurants, how can service and offers be improved?
  • In events, how can this be evolved?

Other points:

• Most believe that M&A activity will return to some strength in 2023 as companies seek to build market share and strength
• There will be changes which take place across all boards after 3 challenging years
• Leadership has changed.

However, the next six months first need to be navigated.