Wellness and Hospitality Resilience in Economic Uncertainty

By Mia A. Mackman President & Owner, Mackman ES | July 01, 2018

Lessons from 2008

The global impact of the Great Recession between 2007-2008 was extensive and significantly touched the lives of millions of people. In the hospitality industry, customary modes to manage the toll of the recession were often layoffs, budgetary cutbacks and business closures. We witnessed a widespread halt in spending, a slowdown in new development and an upsurge of mergers and acquisitions. These changes also greatly impacted executive management roles, compensation structures, and significantly changed the way people worked, traveled and planned ahead.

Despite today's social and political turbulence, a decade later, the economy appears to have significantly improved. Hospitality and tourism are growing, and wellness-travel is yielding powerful returns. New investments and real estate developments are underway worldwide and there is an upswing in hotel, resort and mixed-use real estate development to meet increasing demands. Airbnb launched in 2008 and continues to thrive and expand its platform with local experiences, business travel, meetings and groups and more, further evolving today's travel dynamics. Hospitality in general, looks dramatically different today, then it did ten years ago.

As markets appear to be trending strong on the surface, what are some of the lessons we can learn from the recession of 2008? First, economic change can be an insidious curve. There are always layers of uncertainty and fluctuations looming in new growth and overstated trends. Second, when times are tough, the number one thing people continue to seek is relief. Personal health, quality of life and feeling good, matter more to people than ever before. Three, being innovative and resourceful can convert to true advantages. Being able to adapt and have the dexterity to surf the waves of change are invaluable business skills.

Economic Uncertainty and Program Diversity

The measure "Economic Policy Uncertainty " EPU has been explored by a team of three people to understand the cross sections of "causes and consequences" related to economic-policy uncertainty and how these potentially impact the financial circumstances and management of different markets in the world's economy. This methodology includes human research as well as raw computerized data to create macroeconomic index types. As new markets emerge from smaller subsets, and public policies and tax laws change, these projections show the range of uncertainty over time. Figure 1 below highlights 20-years of the Global EPU index.

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Coming up in December 2018...

Hotel Law: New Administration - New Policies

In a business as large as a hotel and in a field as broad as the law, there are innumerable legal issues which affect every area of a hotel's operation. For a hotel, the primary legal focus includes their restaurant, bar, meeting, convention and spa areas of their business, as well as employee relations. Hotels are also expected to protect their guests from criminal harm and to ensure the confidentiality of their personal identity information. These are a few of the daily legal matters hotels are concerned with, but on a national scale, there are also a number of pressing issues that the industry at large must address. For example, with a new presidential administration, there could be new policies on minimum wage and overtime rules, and a revised standard for determining joint employer status. There could also be legal issues surrounding new immigration policies like the H-2B guest-worker program (used by some hotels and resorts for seasonal staffing), as well as the uncertain legal status of some employees who fall under the DACA program. There are also major legal implications surrounding the online gaming industry. With the growing popularity of internet gambling and daily fantasy sports betting, more traditional resort casinos are also seeking the legal right to offer online gambling. Finally, the legal status of home-sharing companies like Airbnb continues to make news. Local jurisdictions are still trying to determine how to regulate the short-term apartment rental market, and the outcome will have consequences for the hotel industry. The December issue of Hotel Business Review will examine these and other critical issues pertaining to hotel law and how some companies are adapting to them.