As the pandemic ends, there is enormous pressure to "re-open." This phrase is mostly used to describe the hospitality industry, which was devastated by the lockdown and restrictive behavioral requirements of COVID-19. Millions of jobs were lost, airlines placed in jeopardy, hotels and restaurants failed, and prices have risen while services have fallen. Many are asking, what's the new trend? This podcast explains how to separate demand-based trends from supply-based promotions. Only those companies who respond to Trends will survive post-pandemic, because merely promoting supply availability is not a trend.
As the pandemic ends, there is enormous pressure to "re-open." This phrase is mostly used to describe the hospitality industry, which was devastated by the lockdown and restrictive behavioral requirements of COVID-19. Millions of jobs were lost, airlines placed in jeopardy, hotels and restaurants failed, and prices have risen while services have fallen. Many are asking, what's the new trend?
This podcast explains how to separate demand-based trends from supply-based promotions. To do this, we must go back before the pandemic to look at trends in hospitality. The market exploded in the late 1990s as more and more people were enjoying low cost experiences. There was clearly a trend of demand growth for hospitality services. But as we moved into the 2010s it became clear this growth was unsustainable, based upon below-market prices as providers were not recovering full cost. Cracks were developing as customer satisfaction was declining, and demand for better services and better experiences were increasing. The trend was shifting toward a need for more sustainable business models as customer complaints rose, employees were displaying enormous dissatisfaction, asset rents were rising, and returns to investors were shrinking - even disappearing.
The industry pressure today is from a supply side desire to utilize existing capacity. But that is not a trend. That is supply hoping to create demand. And struggling, as customers, employees, landlords and investors are unwilling to live with old, unsustainable products, services and pricing. Trends are based on demand, and that is driven by customers, not supply. "Say's Law" that "supply creates its own demand is invalid. Post-pandemic the trend will be toward better experiences, involving automation and AI implementations to improve productivity, changes in the business model to support higher pay and better working conditions, and improved returns. Only those companies who respond to Trends will survive post-pandemic, because merely promoting supply availability is not a trend.
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