Zarah ChoudharyRising operational costs are significantly impacting hiring, staff benefits, and training in the accommodation industry, a report from Expert Market has revealed.
Almost half (48%) of businesses cited staffing as a key risk, while a quarter said they will cut investment in employee benefits and training.
The Accommodation Industry Report, which surveyed over 400 accommodation businesses, found that rising labour costs were the primary operational risk for just over a third (34%) of respondents, followed by rising maintenance costs (27%) and increasing interest rates (19%).
The findings highlighted the growing financial pressures faced by the industry, which is already experiencing the highest quit rates since 2022.
The impact of these cost increases is particularly evident in hiring and staffing levels.
Nearly half (49%) of franchise businesses and over a third (34%) of independents reported cutting back on recruitment as a direct response to rising costs.
Staff welfare and benefits are also being affected, with 18% of franchises and 10% of independents reducing investment in these areas.
Staff recruitment, retention, and training were identified as the biggest challenge for both franchise and independent accommodation businesses, with 51% of franchise professionals and 29% of independent operators stating this as their primary concern.
To manage costs, some businesses are turning to technology to reduce reliance on staff.
When asked about expected changes in the next five years, 14% said they would rely more on mobile apps to communicate with guests, and a similar number planned to increase the use of automated room amenities.
Automating guest communication was a key theme, with 5% planning to introduce artificial intelligence (AI) chatbots, while 12% said they would aim for less reliance on front desk staff for customer support.
Chris Maillard, editor at Expert Market’s, said: “During an economically tough time, the accommodation industry has a huge set of challenges ahead, balancing staff and facility needs.
“The report shows that people are the key element to a successful accommodation business.
“However, with the highest quitting rates of any industry, this will not be easy to manage – especially as rising costs are impacting staff hiring, benefits, and training.”
He added: “It has to be a mix of hiring people who love this type of work, and retaining them with good salaries and incentives.
“Implementing new technology such as mobile apps and chatbots into operations should help shoulder the increased burden on staff.”
