To be honest, I did not have the current Russian-Ukrainian tension on my bingo card. That said, last month I took a look at some of the industry predictions for 2021 and what we actually saw throughout the year. It seems only fair that I should make predictions of my own if I’m going to evaluate others’ predictions. So, here we go:

It’ll be a while before group demand “is back”

Speaking of things I didn’t have on my bingo card, world #1 tennis player Novak Djokovic being deported from Australia was definitely not on my list. The Australian Open is being held at 50% capacity for spectators for the 2nd consecutive year, and it appears the Beijing 2022 Winter Olympics will lack international spectators. Meanwhile, in California, the National Football League expects to host the 2022 Superbowl in Los Angeles at SoFi stadium without any capacity restrictions. Less than 10 miles away at the University of Southern California, indoor athletic events are limited to 50% capacity. All of this to say, it’s going to be a while before corporate HR and Legal leaders are ready to give the nod to large in-person meetings.​​​​​​​

Supply-chain issues will linger

There will be a couple of factors in play here; a zero Covid policy in China, increased lead times and order backlogs, and freight logistics. Last year, China shut down a terminal at the 3rd busiest port in the world due to 1 positive Covid test, and it wasn’t the first time the government did this. As the largest economy in the world, this will continue to disrupt product availability worldwide. If you hadn’t completed some level of renovation by the end of 2019, you’re probably looking at starting that process in the near future assuming the CapEx budget is there. Only one problem so is everyone else, and everyone that started a renovation in 2020 and 2021, and I’ll bet they’re all waiting on case goods and other key items. Lead times are still stretching up to 36 weeks for some products manufactured in Asia.​​​​​​​

Cybersecurity will be tested as hacking methods evolve

As we move further and further into our reliance on technology, so will industry exposure to cybersecurity threats. Just a few years ago, data breaches used to be the primary concern for large corporations. Today, ransomware attacks have had serious financial and operational impacts on both SaaS vendors and those customers that rely on their services for day-to-day operations. With tensions rising around the potential Ukraine crisis, the FBI, NSA, and CISA warn of increased attacks from state-sponsored and malicious actors.

Labor cost and availability will continue

Upward pressure on wages due to inflationary factors will continue even as the Federal Reserve tries to wrangle inflation, especially in resort areas. Did anyone budget a 7% cost of labor increase for 2021? Because 7% is what the cost-of-living index increased over 2020. As the labor market becomes ever more competitive, operators and management companies will need to evaluate their ability and willingness to increase wages while balancing the level of service offered to guests. Take a look at the issues that some of the major ski areas have faced this winter; minimal affordable housing, J1, and H-2B visa limits, and a dwindling seasonal workforce. Seasonal resort areas may see similar impacts later in the year.

About BirchStreet Systems

Founded in 2002, BirchStreet is the leading global provider of enterprise procure-to-pay solutions for the hospitality sector. BirchStreet's software platform provides leading global hospitality brands with a full suite of procurement applications, including eProcurement software, accounts payable automation, invoice management, inventory management, recipe management, supplier payments, and reporting and analytics. BirchStreet's customers leverage the company's solutions to access a broad network of suppliers and manage billions of dollars of spend annually across a wide variety of categories, including food and beverage, operating supplies, maintenance services and capital projects. For more information, please visit www.birchstreetsystems.com.