Risks affecting the hospitality industry are not only related to inflation, war, and geopolitics. Science has proven that climate-related risks and biodiversity loss are a threat to the fabric of society. The convergence of global systemic risks has a name: 'global polycrisis'[1]. The hospitality industry operates in a volatile, uncertain, complex, and ambiguous environment. Thus, it is challenging for hotel owners, operators, and leadership teams to adapt to the constantly changing circumstances.

Hotels are facing numerous risks which are making it harder than ever to operate under “business as usual”. The pandemic resulted in a global ‘shut down’ with an estimated loss of 62 million tourism jobs in 2020 alone. However, as the world has opened back up, we are seeing new threats to the industry in the form of soaring energy costs, an increase in forced labour among the services sector, staffing shortages as employees are not returning to the industry, new conflicts, guest behavioural changes, and the increasing impacts of climate change. It’s estimated that in the EU, the accommodation sector is likely to face a shortage of 1 in 5 staff, with a similar 1 in 6 shortage in the US.

Rising energy and food supply costs (and insecurity) and chronic staff shortage require attention now but those are not disconnected from longer term sustainability endeavors. These existential challenges span across both people and planet, and many are mutually reinforcing and interconnected. For example, climate change is likely to result in an increase in refugees and consequently put more people at risk of exploitation.

It is therefore important that hotels conduct materiality assessments to understand the risks they are facing and how these might impact their performance. But they also need to understand the impacts they are having on the world around them, and how this might contribute to risks for others. This will help to prioritise the most critical actions as relevant to each business and their employees and, importantly, their local area and community. Examining the external landscape alongside the business’s priorities should also help to limit bias and selection.

There are some great free resources which can support hotels to do this, for example: the risk and opportunity tables in our new TCFD guidance, Water Risk Assessment report, and our ethical recruitment guidance. Our Pathway to Net Positive also highlights key actions which hotels can take to start mitigating and responding to risks.

Though it can feel overwhelming, there is a real opportunity for the industry to develop initiatives which are not only good for business, but also have a positive impact on the world around them.

One example is Hospitality Unite, a new platform designed to support refugees and their families by providing access to hospitality job opportunities. Initially running as a pilot for Ukrainian refugees, the platform emerged as a direct response to the mass displacement of Ukrainians as a result of the war. The platform provides a centralised space for hotel brands to post job opportunities, and a simple online system for refugees to apply and interview for roles while in transit or looking to leave Ukraine.

Not only is Hospitality Unite responding to an urgent moral imperative to support refugees, but the platform also helps connect new audiences of jobseekers with the industry, helping to fill job vacancies, and demonstrating strong ethical credentials which can be motivating for attracting and retaining staff.

These kinds of geopolitical and climate-related challenges will not disappear overnight and don’t always have an easy solution. As an industry, we need to focus on developing long-term strategic plans and responses which tackle environmental and societal issues and support communities around the world. Now, more than ever, we need the industry to come together to collectively address the challenges that the industry and our world face.

[1] WTTC [2] ILO [3] WTTC