Introduction
COVID-19 has had a dramatic impact on the hospitality industry that only a small number of other fields can match. Travel, especially that of the international variety, declined dramatically, reducing the revenues of hotels and similar tourist-oriented facilities. Moreover, in many locations, various bans on in-person dining were put into practice, effectively putting restaurants out of business for their duration or forcing them to resort to deliveries. As a result of these massive changes to business operations, many hospitality companies have been forced to reconsider their strategies. HR is among the most important aspects of these deliberations as employee wages constitute a large portion of the overall costs in hospitality, which need to be reduced for continued survival. This essay will explore the ways in which the situation has changed due to the pandemic and the options available to hospitality businesses.
HR Strategies Leading Up to COVID-19
Before COVID-19, the primary concern of the hospitality industry involved globalization. It primarily concerned hotels and other accommodations, though restaurants were also affected in some ways. As people of all socioeconomic classes became able to travel more, they started demanding high-quality services regardless of their location. As a result, many global hotel chains found that their prior approach of standardization was no longer viewed as adequate despite its ability to save costs, as customers demanded variety and expressions of local culture. With the emergence of new markets such as China and India, additional locations were also constructed to capitalize on new demand. Moreover, with the advent of computer technologies and the Internet, customers of many hotel chains, especially more luxurious ones, began expressing demand for improved loyalty program rewards. Examples include the memorization of their habits and catering to them when first visiting the chain’s locations elsewhere.
All of these new needs required staff with contemporary views and the knowledge needed to solve the problems. As such, HR departments moved forward with additional hires of people with the necessary competencies. They attempted to integrate as many knowledgeable workers as possible in a quick manner to obtain a competitive advantage over the opposition. At the same time, they engaged in work to train their current employees in the skills they would need to support the transition. Information technology competencies and familiarity with the local culture were topics of particular interest, as they correspond with the needs expressed in the paragraph above. Combined with the hiring of staff for the new hotels in emerging markets, the industry was overall on a trajectory of expanding its workforce and improving its competencies.
Changes as a Result of COVID-19
As was mentioned in the introduction, hotels were affected particularly strongly by COVID-19. Restrictions on international travel effectively eliminated much of the traffic many hotels usually received. Even after some of the bans were lifted, the recovery of passenger flow has been slow due to a variety of reasons. At the same time, lockdown orders were introduced internally that affected other hospitality facilities significantly. Many restaurants had to close or resort to deliveries, curbside pickups, and other approaches that circumvented indoor dining. While they may have been able to survive in this manner, all of these methods removed the need for service staff. Moreover, with other businesses closed and economies damaged, traffic to recreational businesses such as restaurants dropped, as did their revenues. As such, the need to reduce costs emerged, with the primary method of doing so being staff furloughs and layoffs.
At the beginning of the lockdowns, many companies were faced with the need to lay off staff to remain solvent. Under conditions of impending bankruptcy, strategic planning retreated to a secondary role, letting immediate concerns take precedence. It likely influenced specific layoff decisions, with more valuable workers retaining their positions while those less beneficial to the company long-term were removed. However, economic need presumably dictated the removal of many employees who should have stayed from a strategic perspective. Moreover, while attempts to hire them back have likely been made after recovery, they were likely to have failed. Former workers presumably found employment elsewhere in the time that passed after they were dismissed from their positions and would not necessarily be willing to return. Additionally, after being fired, they may have developed distrust toward the company, seeking a more employee-oriented employer.
Future Strategic Decisions
The most important effects of COVID-19 are the changes in operations that it has introduced, such as the need for social distancing. Ensuring employee safety is now critical, as they have to interact with each other as well as clients on a constant basis. If one individual is infected and spreads the disease, the entire location may need to be closed for an extended period. As such, workers need to be taught appropriate countermeasures and be provided with the protective equipment they need. These measures will likely remain in place following the end of the pandemic, as they will enhance overall safety against a variety of respiratory conditions. As such, HR needs to develop and implement protocols that maximize safety without interfering with operations.
At the beginning of COVID-19, hospitality businesses could choose one of two primary strategies: retain employees or lay them off. If they decided to do the former despite the economic pressures and succeeded, they are likely not to need many significant adjustments for the new conditions. Knowing the situation across the industry, the team can be expected to be loyal to the company that retained it. Moreover, its reputation as an employer would be likely to improve, attracting new highly skilled workers. Conversely, the approach of laying off employees would reduce loyalty and damage the company’s reputation as an employer. With that said, it would also let the business optimize its operations, reducing the number of redundant workers and enabling superior performance after recovery. Still, the cost of hiring and training new workers would damage the savings that the business may have made through the layoffs.
This discussion of past strategies is relevant because it will inform the strategic decisions that different hospitality companies will need to make to adjust to new needs. Those of them that retained their workers can continue pursuing priorities that were prevalent before the pandemic. Their staff will also have been trained in COVID-19 countermeasures, having worked under these conditions for a considerable time. On the other hand, companies that conducted layoffs will have to return to normal operations first, hiring and training new staff. With a less well-coordinated and experienced team, they will need to emphasize the basic aspects of operations, creating synergies that may have been lost during COVID-19. Still, after they succeed in doing so, the priorities of hospitality companies will align regardless of the approach they had taken prior.
In the long term, COVID-19 has also demonstrated a critical weakness in the hospitality industry. It is vulnerable to phenomena that limit travel and visitations, relying too strongly on short-term revenue. In the absence of traffic, many positions become redundant and need to be liquidated only to be rehired later on when it recovers. This outcome is the consequence of inadequate crisis management on the part of the companies that were affected by it. In the future, HR departments will need to design strategies intended to combat such forced closures without sacrificing staff unnecessarily. The methods by which they may achieve this purpose are unclear, though monitoring developing situations ahead of time and instituting practices that may enable the locations to avoid the need to close in cases of conditions such as lockdowns.
Conclusion
COVID-19 has not eliminated the strategic needs of hospitality businesses around the world but added new objectives instead. First, HR departments had to choose whether to lay workers off or retain them despite the financial implications of doing so. Most selected the former option, possibly due to pressure from executive management and other departments. Now, they need to prepare for new working conditions and educate new staff to follow them if necessary. The hiring of new workers with the competencies necessary to address pre-2020 issues will have to continue as soon as possible. Lastly, HR departments will need to improve their crisis management policies to minimize the effects of crises such as COVID-19 in the future. With these measures in place, hospitality businesses will be better prepared to address the needs of the future.
References
“COVID-19 Employer Information for Hotels, Resorts, and Lodges.” CDC, 2020. Web.
“Hospitality Management Guest Panel: Addressing the Future of Hospitality Locally + Globally.”YouTube, uploaded by GeorgetownSCS, 2014. Web.
AHLA. State of the Hotel Industry Analysis: Covid-19 Six Months Later. 2020. Web.
Gitlin, Lindsey Brous, et al. “Managing Restaurants in the Time of Coronavirus: A Look at Emerging Best Practices.”eCornell, 2020. Web.
Sogno, Alex. “Covid-19: Hoteliers Review Their Human Resources Strategies.”EHL Insights. n.d. Web.