I am close to returning home from a wonderful two weeks in the United States, essentially to attend, network, write and moderate at STR’s Hotel Data Conference in Nashville, co-hosted by Hotel News Now.
Speakers and panelists at hotel industry conferences generally stick to the message and the belief that the cup is half full. All the while, I listen to the glory and ebullience and think back home to the United Kingdom, where all is woe.
“We’re doomed!" as the classic line goes, the catchphrase of Private James Frazer from the TV comedy show "Dad's Army."
Before this century, every recession or slump felt in the U.K. was rectified by U.S. visitors returning and spending wads of cash.
The world became very globalized after that point, and economic problems tended to be global, not individual. Two countries come to mind as exceptions, notably Greece and, due to very recent news, Argentina, where inflation is expected to reach 90% by the end of the year.
The U.K. is a major world economy, but this week brings news from the Office for National Statistics, that wages and salaries have reached their lowest level of spending power since records began.
Yes, the title of this piece is a little over-dramatic, with the ONS only having collected data on this exact metric since 2001.
The latest data shows that in the second quarter wages grew 4.7%, but because inflation is hovering above 9%, “real” wages in that period fell 3%.
The U.K. is beset by several strikes, notably to public transportation, and there has been speculation that there could be the first General Strike since 1926.
That is unlikely due to the fragmentation of union membership, but there definitely is real concern over wages and spending power.
The big question is whether that will lead to the elimination of discretionary spending from the hotel industry.
With domestic leisure travel still king, will British hotel performance slump, or will British people consider the two-week holiday, and increasingly the long weekend, as must-haves and worth scrimping for?
The ONS statistics highlighted the discrepancy between public- and private-sector wages, but there are accommodation options that take from each or both camps.
For example, early this year I heard one source who said residents of Liverpool and Manchester would not be traveling the 50 or so miles to the scenic Lake District as gasoline prices were too high.
Gasoline might be a little cheaper than it was, but other expenses are cutting in to the daily budget.
For many, times are tough.
Is luxury and upper-upscale hotel demand sufficient to see the industry through?
I would argue travel remains vitally important, but with energy price increases set to rise even more in the late fall, there is real concern to our industry, and to other industries that might or might not depend on discretionary spending.
Hotel industry marketers and revenue managers have a role here, to encourage people to travel to broaden their horizons, get the physical and mental rest required and to enjoy life — or at least forget when the next electricity bill is coming in.
The talk at HDC was that if a recession is to come, its effects would not be terrible. Meanwhile, the governor of the Bank of England suggested a recession is on the way, and his statements sound like a self-fulfilling prophecy.
People also are concerned, or even angry, that the government is on vacation itself at this time of year.
Boris Johnson, a lame-duck prime minister, has taken a second summer vacation, and the lengthy process of electing his successor has put daily politics to one side.
UKHospitality has pointed out in its letters to government officials that U.K. PLC is not on vacation and requires emergency lifeguard assistance.
I hope mouth-to-mouth resuscitation is not needed. Doom is overrated, and we’ve lived through enough of it lately.
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