Comment: Mind the gap in expectations

Are we ready for the Summer 22 holiday season? How could we be, argues Steve Endacott

The Easter Holidays signal the start of the summer rush for breach destinations, but after being severely disrupted for two years by Covid closedowns is our industry ready to handle it?

The UK hospitality sector continues to be hit by staff shortages caused by the double whammy of Brexit and Covid. Many foreign workers returned home during Covid and have not returned as they have either reassessed their life priorities or found work in other sectors.

The damage this can do to hotel operations was highlighted to me during my ‘mini-moon’ to the Lake District staying at the five-star Low Wood Bay, a beautifully presented hotel and spa.

Returning to the hotel after a day out, I was surprised to find the room had not been made up and we had no fresh towels. When I spoke to reception, I was informed that due to shortages of cleaning staff, new arrivals where prioritised and my room would not be serviced or new towels supplied for our three-day stay.

Having paid a premium price and being told to join the queue of complainers, I threw my toys out of the pram, savaged the hotel’s reputation on every review site and told all my friends never to stay there.

I only tell this story to highlight how important every member of staff is to the operation of a luxury hotel and how quickly brand damage can be done.

Staff shortages are unlikely to be as severe across Europe, but I’m hearing the Balearic and Canary Islands are also facing staff shortages and difficulty importing staff for the summer.

As well as downplaying customer expectations, we need review sites to put more weighting on post-Covid reviews in average scores, to reflect today’s reality and reset pre-Covid reputations.

Ground transportation services may also be severely stretched in many destinations as taxi shortages are common with drivers not wishing to return to relatively low paid work and unsociable hours.

The rental car industry has been impacted by a drastic reduction in new cars as manufactures no longer need them as dumping grounds for unwanted car stocks. This has sent rental prices sky high and will hit the villa and private accommodation markets.

Staff shortages at UK airports are a looming issue for the outbound sector is we ramp up to summer volumes. The Airport Operators Association warned this week of queues at check-in and security over Easter taking up to two hours, which could get worse as volumes ramp up for summer departures.

On the Beach’s offer of free fast-track security and lounge access looks a shrewd piece of brand building. I personally won’t be travelling without pre-booking fast-track security and passport control for my return.

Travel businesses will also need to mind the cash gap as the summer season starts. Traditionally, the cash low point was February-March due to low cash intake. However, many customers delayed holidays due to Covid, deferring to Summer 22 dates or taking credit notes used at the start of this year. The money from these bookings has long been spent, creating a cash drain as agents need to pay suppliers for these holidays.

Theoretically, all this cash will be held in segregated funds. But some of the UK’s largest retailers trade from ‘pipeline’ monies. This is fine unless merchant acquirers, which process card payments and carry the risk of agents failing, get spooked and either withdraw facilities or more likely retain cash for longer to hedge their risk.

This double squeeze could create a ‘cash gap’ which leads to several collapses in the coming months.

It’s great to see demand return to our industry, but we would be naive to think a sector that has been hit harder than virtually any other can bounce back instantly and provide pre-Covid service levels without some major hiccoughs.

We’ll work through these issues to deliver much-needed holidays for our customers, but some dampening of expectations may be wise.

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