HOLLYWOOD, Florida — The hospitality industry in the Caribbean generally has recovered faster than other parts of the world, and while that opens up new opportunities for hoteliers, those in the area still face a number of headwinds.
Speaking during the “Road to Recovery” panel at the Caribbean Hotel & Resort Investment Summit, hoteliers explained how they’re handling labor issues, rising costs and travel demand.
Investing in Staff
Spice Island Beach Resort President and Managing Director Janelle Hopkin said her property brings in high school students regularly and speaks to them about working in hospitality. Her goal, she said, is to explain to students how they can pursue degrees and work in hospitality without necessarily working at a hotel.
“There is definitely a stigma [around working in service-related jobs], and you just have to keep encouraging the young people,” she said. “Everyone's going into banking, they want an office job, but the hospitality industry — you have to love it.”
It requires dedication, so it takes a love of hospitality, but there’s so much more opportunity than what they directly see, Hopkin said. It’s up to professionals in the industry to encourage them, go to career days and speak with students, she added.
Spice Island Beach Resort offers an internship to give local college students hands-on experience in different departments before they decide their degree focus, Hopkin said. She had a similar internship working different hotel positions in London.
“That's the only way, if they have actually experienced it and touch it,” she said. “What you see in the textbooks, it's not always going to resonate with them.”
Having started out at Marriott International, Playa Hotels & Resorts Chairman, CEO and Director Bruce Wardinski cited J. Willard Marriott by saying that if hotel companies keep the associates happy, they’ll make the guests happy. Playa invests heavily in training because it’s critical and it shows employees a path forward, he said.
Playa also promotes from within, and only a few of its general managers are expatriates, he said. That means most of the resort managers are from the country where the resort is located, or it may be they’re from a nearby country as they move managers around temporarily.
“We find that is a really good way to give them more opportunities,” he said.
If there’s not a path forward at one resort, they’ll have the possibility of advancing at other Playa resorts, potentially without having to leave the overall market, he said.
That’s an important point, Hopkin said. Many big resorts in the region have local staff but department heads and managers from outside the region.
“You’d be working with a company for four or five years, and every four or five years, someone comes in over you and you’re not given the opportunity,” she said. “I think that is where it hits, and then they feel like there’s no upward mobility.”
Managing Inflation
Inflation is a runaway train in the U.S., said Todd Hricko, senior vice president and head of global hotel development at Hard Rock Hotels & Casinos, adding he doesn’t know what the overall effect will be.
“We were used to it in our expense line items, but when we’re saying 10% to 15% inflation, I definitely worry about that,” he said. “Hopefully being a worldwide company, we’ll be able to go to other areas of the world to grow.”
At least in the hotel industry, hoteliers can raise their rates daily, Hricko added.
Over the past several years, inflation has been higher in the countries where Playa operates than in the U.S., so the increase in America is something the company is already used to, Wardinski said.
“It’s been consistent with what we’ve dealt with for years and years,” he said.
Being able to charge higher rates makes coping with inflation easier, he said. Unlike the U.S., where the focus has been on saving money to offset higher labor or food costs, the company is trying to improve its food and beverage offerings.
“People are paying higher rates, they want better food and beverage, so we’re actually paying more, and we’ve been fortunate we haven’t had the labor shortage,” he said.
Source Markets
For a region dependent on airlift, the price of flights is an issue, but overall airlift hasn’t been a problem from the U.S. or even the U.K., Hopkin said. There’s still nothing coming in from Europe and Canada, leaving hotels in the Caribbean with just the two main markets.
Airlift will always be a problem, and part of that has to do with many of the islands sharing the planes, she said. Grenada shares planes with Antigua, Barbados, and Tobago, so there’s never a full flight. The issue isn’t so much the price as it’s the availability of a seat.
“You can afford to get to Grenada, but you can't get onto the plane because half of it is being booked to go to Barbados, so it’s definitely a challenge.”
As well as the Caribbean has been doing now, Wardinski expects even higher demand next season. There’s a lot of people who haven’t traveled since COVID-19 began, he said. In the U.S., there are still many who haven’t felt safe enough to do it. There are also those who would otherwise travel internationally are worried about getting stuck in a foreign country because of the testing requirement for reentry.
The recovery has started in Europe, and Canadians missed the travel season this winter, so they’ll probably come next winter, Wardinski said. Asian travelers, who typically made up about 20% of Playa’s Cancun business, haven’t come back yet.
“These are all incredibly positive signs that, a year from now, I think those groups hopefully will all be back,” he said. “We’ll be driving even more business.”