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Lessons for Travel and Hospitality Companies in a Post-Pandemic World

Travel and hospitality was one of the hardest-hit sectors during the pandemic. According to, in 2019, the total travel and tourism impact on the U.S. economy was $2.6 trillion and was responsible, directly and indirectly, for one in eight U.S. non-farm jobs. Of course, those numbers came crashing down in 2020 as the pandemic sent the world, and especially this industry, into lockdown. By all measurements—air passenger miles (Figure 1), hotel nights (Figure 2), or any other commonly utilized industry metric—the pandemic decimated the hospitality industry.

None of that will come as a surprise to this audience. What may surprise some, however, is how significant the ramp-up was once the pandemic eased and how sustainable many believe it will be through the next macroeconomic cycle. With many thinking the pandemic is now over, consumer sentiment has changed, with many consumers having permanently shifted their mindset to prioritize vacations more than they have in the past (Figure 3).

This article explores how the pandemic and ensuing demand increases impacted companies and management teams across the hospitality sector, and more importantly, the characteristics, mindsets, and priorities of those which are likely to be most successful (and sustainable) in the future.

To smart management teams, COVID was a crash course in becoming nimbler and more disciplined. Today, three years removed from the immediate crisis of the pandemic, hospitality executives should heed certain lessons learned as they forge ahead in a post-COVID world.

Be Nimble

One of the larger challenges facing the hospitality industry today—as with many other industries—is managing the labor force. These companies face the common challenges of labor shortages, the “great resignation,” and now, historically low unemployment.

Perhaps unique to this sector, however, are the challenges presented by the speed with which travel and tourism have come roaring back. So-called “revenge travel” now appears to be more sustainable. Unfortunately, the short-term cutbacks that hospitality companies made to survive—laying off employees, discontinuing certain services, and shuttering facilities—can’t be reversed with the flip of a switch, especially in the toughest labor market in several decades.

Looking forward, companies need to build flexibility into their staffing and plan better for scenarios in which they’ll need to scale up and down. As an example, many large resorts and cruise lines that depended heavily on foreign workers were woefully short-staffed in 2021/2022 as work visas were closed. That is not a problem that can be solved quickly, but thoughtful planning and preparation should lead management teams to identify weaknesses in their labor base and build resilience where possible.

The medical profession found creative ways to remain nimble and meet the demands placed on it by the COVID-19 pandemic, and the hospitality industry should take note. One prominent example was the U.S. government mobilizing a reserve corps of medical and public health professionals to assist with vaccination efforts and public health activities. Many of these professionals were retired but agreed to share their expertise during the emergency.

This article was published in TMA’s
Journal of Corporate Renewal
April 2023 Issue.

Similarly, hospitality firms may benefit from building and maintaining a corps of critical personnel who could be called on to provide short-term continuity support. These could include recent retirees or others who could be incentivized to come back on a transitional basis, such as airline pilots, cabin crew, hotel concierge staff, head chefs, or boat captains. The medical field also leaned on medical school students to take a more active role. The hospitality industry management teams could act similarly by partnering more closely with undergraduate and graduate hospitality programs to ensure a stable pipeline of talent.

Furthermore, post-pandemic travel patterns have changed, and certain nimble companies have leveraged those changes to their advantage. For example, the prevalence of hybrid work has created an environment where leisure travel is more evenly spread throughout the week, especially improving demand for Thursday and Sunday stays. Strong marketing efforts and investment in amenities supporting the “bleisure” (business + leisure) traveler can help spread labor force needs across more days instead of needing increased headcount in condensed time periods. This trend is only increasing, and companies that can attract these travelers will be better poised to reduce labor per occupied room night.

In spite of demand returning to pre-pandemic levels, management teams shouldn’t make the mistake of simply figuring out how to scale up staffing levels to pre-pandemic levels. Being nimble also means closely analyzing operations for efficiencies and areas that can be fulfilled with enhanced technology. Instead of the knee-jerk reaction of scaling labor back up, companies must consider whether functional needs can be met by existing staff who could be cross-utilized or upskilled. In short, all staffing and functional processes should be reviewed for potential efficiency improvements.

During the pandemic and ensuing post-pandemic challenges, amenities and perks dried up under supply chain crises, lack of demand, and efforts to find quick savings. Accordingly, in the return to “normalcy” in this industry, management teams attempted to find the sweet spot among cost increases, amenity cuts that consumers would tolerate, and stabilizing margins.

While returning travelers are most acutely noticing cutbacks in services or amenities, they have, in many cases, generally accepted them as necessary in the post-pandemic world. Housekeeping at hotels and resorts in some cases is now provided only once every three days, and airlines and hotels are charging for amenities that used to be standard. Some airlines charge for seat selection and carry-on luggage, for example:

Southwest’s inability to locate employees and staff flights during winter disruptions cost the company significant profits and reputational damage, making the airline a cautionary tale for companies delaying technology investment.

While each of these can improve a company’s bottom line, they can make customers feel like they are being “nickel and dimed” if these changes are not managed carefully and thoughtfully. Management teams should constantly assess operational changes that may impact the guest experience and analyze whether the increased profits are worth potential negative consumer sentiment.

A prime example of this problem involved Disney, which received negative press coverage over price increases and charges for items that previously were free, including hotel parking and picture downloads. The blowback convinced Disney executives that they had taken things too far, and they reversed many of the decisions.

Similar key decisions require management teams to walk a fine line between maintaining margins and providing a positive consumer experience. Those who can nimbly navigate such issues will be poised to win in the hospitality sector’s next act.

Adopt Technology

As travelers had been forced by the pandemic to accept technological advancements that they otherwise may have resisted, every industry has been, to varying degrees, digitally transformed since 2020. Investing in technology—both consumer-facing and enterprise—is a great way to address a wide range of challenges and seize new opportunities.

One of the most easily recognized adoptions of consumer-facing tech in the hospitality world is the abundance of self-check-in kiosks—from airport boarding pass printing to rental car counters to hotel front desks. While heavily relied upon to eliminate unnecessary physical contact during the pandemic, self-check-ins can also speed up the process for travelers and reduce staffing requirements for the company. It is possible now for a consumer to travel from home to a hotel room without having to interact with a single employee the entire time.

Consumer-facing technology will also continue to develop and offer smartphone-enabled control over most aspects of a trip. Whether it’s a hotel mobile app that lets guests access their room using a digital key or a cruise line’s cabin amenities like TVs and lighting controlled by the guest’s smartphone or an airline app that provides in-app ticketing and push notifications, technology enhancements can improve the customer experience, reduce labor costs, and enable more seamless incremental purchases.

A significant benefit of new technology adoption is the sheer amount of data it makes available to the industry. Companies and management teams should make investments in consumer-facing technology, which can provide a better customer experience while also gathering valuable data that can be mined for strategic consumer insight, re-marketing, and personalization. Greater access to vastly more data points about consumer habits allows smart management teams to learn about their customers at a granular level and provide value—but only if they properly implement tools and analytics that enable them to parse the mountains of data and act on the insights they glean.

As one example, during COVID, Disney instituted a reservation policy in conjunction with purchases of theme park admission tickets. Based on this guest reservation data, Disney knew precisely how many people would visit each park each day and could staff accordingly. This knowledge of fluctuations in attendance gave the company better control over labor costs, resulting in significant savings.

In addition to consumer-facing tech advancements, companies should also invest in enterprise-level technology that supports true back-end integration and analysis, including enterprise resource planning (ERP) or customer performance management (CPM) software suites. These platforms leverage the newest technologies to comprehensively track and monitor accounting, finance, and operations to provide data for better decision making.

Further up the tech advancement spectrum, artificial intelligence (AI) and advanced forecasting algorithms (in labor management, for example) can enable a flexible workforce that ensures companies maximize the return on their employees’ availability. Software can forecast demand increments and suggest staffing adjustments accordingly to ensure operational efficiency. These advanced software programs may be critical for airlines in particular, which manage global workforces of employees who are constantly on the move. The software can help plan staffing for routes while accounting for mandatory rest periods as well as weather or other delays.

As was widely reported, Southwest Airlines clearly was on the other end of the spectrum with respect to labor management sophistication over the holidays. Southwest’s inability to locate employees and staff flights during winter disruptions cost the company significant profits and reputational damage, making the airline a cautionary tale for companies delaying technology investment. Management teams poised for the most success are those that not only keep up with improving technology but invest to get ahead.

Stabilize Finances

The hospitality sector benefited significantly from targeted relief in the $1.9 trillion COVID relief plan, including $14 billion for airline payroll support and $15 billion for companies hardest hit during the pandemic—including many travel and tourism companies. Government stimulus during this period was absolutely essential and was the only thing that kept many hospitality companies operational.

Now that travel has returned to pre-pandemic levels, coupled with the tremendous pricing power companies in this industry are experiencing, hospitality companies are seeing positive cash flow. With these additional profits, hospitality companies would be wise to carefully consider how to fortify their balance sheets to mitigate the next 2007- or 2020-type headwinds.

Fortunately, history shows, especially in certain subsectors of the hospitality industry, that the industry does actually learn from cataclysmic events. The Great Recession from 2007 to 2009 wiped out numerous timeshare companies, while far fewer went out of business during the 2020 pandemic. Since the pandemic, the timeshare industry has been characterized by consolidation (e.g., Hilton Grand Vacations acquiring Diamond Resorts, and Travel and Leisure acquiring Wyndham Destinations), showing signs of companies attempting to strengthen through realization of synergies and scale. Wyndham Hotels and Resorts, the largest hotel brand franchisee—and a good representative of the industry—says that its franchisees are more well-capitalized than they have ever been.


Wyndham, other hotel companies, and most hospitality industry companies are being fueled by high consumer spending and demand for travel, but will it continue? No one can be certain, so to protect against the next headwinds, in addition to remaining nimble, hospitality companies would be wise to use their current “winnings” to invest internally, either on solidifying their balance sheet or improving technology. Which approach will prove most prescient in the long term remains to be seen, but companies shouldn’t squander the current opportunity.

It appears, from an analysis of the financial performance and leverage metrics of a sample of medium-cap publicly traded hospitality industry companies, that many management teams are already heeding some of this advice (Figure 4). The analyses suggest that operators have seen their EBITDA margins expand (500 to 1,000 bps) and have reinvested some of this cash flow to reduce their net leverage (0.5x to 1.5x). This sample of operators, and hopefully many of their peers, appear to be better positioned to weather future headwinds than they were during previous cycles.

When the pandemic first hit, the industry needed drastic short-term action to stay afloat and didn’t have the luxury of time to optimize a perfect response. As the world has opened up, travel has returned, and pent-up demand is leading to increased profits and pressures on previously hollowed out organizations. The crucible of COVID has yielded hard lessons that hospitality executives must heed as they scale back up to meet current market demand, find balance between savings and investment, and build resilience to face future disruptions.

Journal of Corporate Renewal - April 2023 - page24

The Journal of Corporate Renewal (JCR) is the leading publication devoted exclusively to professionals in the turnaround, corporate renewal, and

About the Authors

Matt Beresh
Matt Beresh
Senior Managing Director, Turnaround & Restructuring

Matt is a senior managing director within the Turnaround & Restructuring practice at Accordion. He has 25 years of experience providing financial and operational advisory services to distressed and underperforming clients, many of them in the hospitality sector. A trusted financial advisor and frequent interim executive, he helps clients understand root causes of their challenges and implement strategic initiatives to improve them. A member of TMA Chicago/Midwest, Beresh chairs various committees and has served as a VP and board member.  Read more

Nathan Klepacki
Nathan Klepacki
Senior Director, Turnaround & Restructuring

Nathan is a senior director within the Turnaround & Restructuring practice at Accordion. He has significant experience leading underperforming companies through initiatives focused on realigning a business’s strategic plan, operational execution, and invested capital. He often assumes a senior leadership position within an underperforming company, acting as a primary driver of turnaround initiatives while supporting management with day-to-day execution. Klepacki has worked with many private-equity-owned travel and hospitality companies.  Read more