Read time: 4 minutes
The term “Industry 5.0” refers to the direct cooperation between humans and intelligent machines (robots), which means robots helping humans to work faster and better by using technologies such as the internet of things and big data. In addition to the familiar two pillars of Industry 4.0 – automation and efficiency – this requires a personal, human touch. The same can be said for the hospitality industry, which must also adapt in a post-COVID world to remain relevant and indeed survive.
Tech & Marketing
Considering that the people who could always be relied upon to book business class flights and rooms in five-star hotels – i.e., senior and middle management – have reduced business travel to a minimum, it is becoming more and more necessary to rethink the approach to hospitality in less picturesque city locations. Similar to “workations,” a mixed form of business and leisure travel (“bleisure”) could prove promising. So for hotels that were once geared almost exclusively to business travelers – guests who sleep, have a quick breakfast and strain the Wi-Fi to its capacity – it is not enough to offer an “anti-inflammatory-super-collagen-boost latte” alongside the filter coffee.
To survive in this evolving world of hospitality, hotels that formerly targeted business travelers must now focus their efforts on revitalization and the creation of a contemporary brand image that is attractive to the modern-day traveler. This means making the transition from a “room upgrade, with free Wi-Fi and good airport connections” to a “green 5G-ready hotel with a spacious onsen spa and self-check-in via the app,” in order to get a “safe-travel stamp” from one of the major hotel booking portals.
However, such a paradigm shift requires not only a creative approach to contemporary design and taking on more hip and qualified staff who are familiar with individual preferences (yoga instructors, baristas, etc.) in a time of acute staff shortages, but also a brave leader – a leader who does not lose their resolve to transform the business, even during lengthy and heated negotiations with the various parties who all have a stake in the hotel, such as hotel owners, operators, franchisors and restaurant lessees. This driven individual must also have unwavering faith in their vision since they are the ones who must ultimately pitch the business plan to the final decision makers: the financing entities.
An example from the authors’ home base is illustrative. Overnight stays in Germany, especially Munich, are almost back to pre-COVID levels, but in a world of high inflation, rising interest rates and rocketing energy costs, property values have not yet recovered from the crisis. And even financing is not the last of the challenges, because building renovation or change of use (such as changing or adding amenities, bars and leisure facilities) requires corresponding building or change of use permits in most cases – not to mention compliance with ESG criteria and the need to meet certain sustainability KPIs and environmental targets. Such undertakings require not only detailed planning and a reasonable timeframe for obtaining the necessary permits, but also – if they are to be realized – that construction companies and building materials are available and cost estimates are predictable, which in current times may turn out to be a challenge.
In regards to the capital investment needed to transform the hospitality industry, it should be expected that international investors and banks providing finance must also adjust to the changed market and rethink their conservative valuations and short-term expectations of operational properties. They will probably favor investments in tailored offerings that will generate revenue in the short term, but will also pay for themselves in the long term by contributing to higher margins and profits.
Bloggers and content creators offer a significant advertising platform with an enormous reach, but they are not going to cover the costs of staff, toilet paper, gas central heating, etc. And so, the hidden-away hotel on a green strip of land in a city of concrete and glass, promoted on social media or the metaverse in dazzling, colorful pictures, without any associated debt owing and with fully paying guests in the “real verse” is doomed to fail – and no robot butler in the hallway or contemporary art on the wall will save it.