Survival is the current goal, but what is the catering and hotel industry’s future?

Catering and hotel industry are obviously the one most severely hit by the pandemic-caused crisis and lock-downs. According to the Hungarian Hotel and Restaurant Association’s trend report, the number of guest nights fell by almost 40% nationwide in 2020 compared to the previous year, while in November the decline was even more dramatic: almost 90% compared to 2019. Plenty of people are forced to leave their careers to seek livelihood in other areas, and the big question is whether they will return later. At the same time, the industry is already preparing to re-opening and restart. How will this all be carried out? WHC Group looked for the answer to this question with the help of top experts at the March event of HR Fest conference series.

Catering and hotel industry has been suffering from one of the deepest, protracted crises of decades for exactly one year now. This is also a challenge for national economy, as the sector counts as a driving force: tourism-related activities meant employment for nearly half a million people before the outbreak of the coronavirus, and domestic guest nights in themselves meant about a turnover of HUF 400 billion for the segments. According to estimates, the multiplier effect caused an economic loss of nearly HUF 800-900 billion due to the problems in the catering and hotel industry, and it is yet unknown how and at what pace the sector will recover after the pandemic. The picture is mixed: many are only able to catch their breath with sectoral subsidies and food delivery, whereas others are already preparing for the post-pandemic world, but uncertainty is common – will the catering and hotel industry be capable of getting back the valuable labour force leaked away?

Where does labour force wander to?

Representatives of the sector shared their experience of the past year and plans for the near future at the March event of HR Fest. According to Zsuzsanna Kiss, HR Director of Budapest Marriott Hotel:

„the sector already lacked nearly 10 000 employees in 2019, as hard-working and motivated colleagues with solid language skills were enticed by business service or call centres even before the outbreak of the pandemic – not to mention alternatives abroad. It is key for the hotel and catering industry to emerge from the crisis stronger, with new plans and better wage options, in other words, the whole HORECA sector needs to level up in order to remain competitive in the labour market in the long run.”

Realizing this, most industry players place a strong emphasis on development, creating more flexible working conditions, and prioritizing employee safety and health.

Retaining employment is another real challenge for employers, just as maintaining motivation and trust in their profession has become a key issue. Viktor Göltl, CEO of WHC Group, a company focusing on permanent placement, temporary placement, student and pensioner work, and wage accounting, thinks that uncertainty can generally be seen among employees, which makes it particularly important for management to maintain continuous, transparent communication, as well as measures to support the sense of security, such as regular COVID testing or social distancing in daily work.

Constant replanning has become part of normal business

Industry players have plenty of plans and strategies in their heads, but for the time being, actions related to re-opening and its timing are part of a fantasy rather. In general, an exceptional summer season similar to last year, and a revival of domestic tourism, at least temporarily, is expected. Positive outlook is only expected in connection with Lake Balaton and some other popular rural destinations though as in the capital city most hotels have already let go of 2021, and predict the relative return of previous demand for next spring season at the earliest, while some say getting back on their feet may take up to 2-4 years. There are hotels belonging to larger chains that have been closed for a year, while other facilities open from time to time or are constantly welcoming business travellers. According to Tamás Flesch, owner of Continental Group and president of Hungarian Hotel and Restaurant Association, such estimation cannot yet be made about the return of foreign guests, however, it is already clear that building up the proper level and quality of employment when re-opening might be the bottleneck.

A chronic shortage of labour is envisioned

Experts say whether a gradual or explosive awakening awaits the HORECA industry, the consequences of the crisis will make their effect in the long run. It can already be seen that employers are more flexible and have more trust in their colleagues, employees appreciate stability even more, while cohesion among colleagues has become stronger. This is the very fact executives in the sector have faith in: in this field, employee experience and guest experience are almost inseparable, so they hope catering and hotel staff who are committed to their profession will return after the crisis.

Despite optimistic plans however, it seems coronavirus has seriously shaked the future of the catering and hotel industry.

Among the younger generation, the industry lost part of its popularity already before last year, since we are talking about a profession that requires great dedication, perseverance, exceptional stress tolerance and, in particular cases, weekend or night work, whereas wages often do not compensate employees for these sacrifices.

Unfortunately, the pandemic has accelerated these trends, also demonstrating that in spite of the seemingly bombproof, internationally sought knowledge, an outer circumstance can destabilize employees1 livelihood at any time. The lesson is therefore given: the most important goal for the catering and hotel industry is to rebuild the confidence that has been shaken over the past year as soon as possible, and to provide employees with a secure alternative in the longer term – on which there is full consensus among industry players.