IHIF Day 3: CEOs discuss hospitality's future

BERLIN—As the International Hotel Investment Forum drew to a close here yesterday, CEOs of six hospitality companies gathered for a session moderated by Philip Ward, CEO of the hotels and hospitality group EMEA at JLL, to debate an overarching question: What initiatives will have the most positive impact on customer satisfaction? 

What the Customer Wants

Peter Fankhauser, CEO of the Thomas Cook Group, noted the company’s expansion from tour operator to hotel company in its own right. The Casa Cook and Cooks Club brands cater to the new generation of travelers by focusing on lifestyle and culture, he said, adding the gambit has paid off, with three-quarters of the company’s guests being new customers. “We’re reinventing the old-fashioned package travel,” he told the audience.

Travelers also are increasingly focused on experiences, said Lindsey Ueberroth, CEO of Preferred Hotels & Resorts, who argued promoting a lifestyle is more important than promoting loyalty. “What do you offer the traveler beyond when they're staying at your property?” she asked the crowd. “How can you provide a one-of-a-kind experience that may be associated with one of your hotels?...How do you pull the lifestyle elements into that loyalty program?” 

Merilee Karr, founder/CEO of home-sharing service UnderTheDoormat, noted the growth of her side of the industry and pointed out that big hospitality brands have been “dipping their toes into the water” of home-sharing to varying degrees for a while. “In five years' time, I think every one of the major hotel brands will have a home-accommodation brand in their portfolio,” she predicted. “Customers will choose what they want in a specific situation. Sometimes a home makes more sense. Sometimes a hotel makes more sense, and the brands are going to want to provide any type of accommodation that a customer wants to be able to keep those customers within their portfolio.”

Collaboration

In hospitality, said Karr, collaboration is key. “In an industry that is growing at 30 percent each year, there's space for a lot of players in this market. And I think for all of us, it's about growing the industry and growing it responsibly—setting standards and being clear about what those are to everyone," she said. 

Karr said UnderTheDoormat is launching an accreditation plan for the sharing sector, allowing hosts and management companies alike to be property vetted. “It's everything from health and safety standards to consumer protection, all the things that hotels get accredited for,” she said. “These types of things will transform our industry.”

More important, she added, factors like accreditation will help close the gap between hotels and the sharing economy. “Opportunities to collaborate between the new industry and the traditional industry are becoming more and more,” she said. 

Collaboration between home-sharing and traditional hospitality companies seems poised to become increasingly necessary as more businesses promote the sharing economy. Amar Lalvani, CEO/managing partner of Standard International, recalled an IHIF gathering some years back in which the hotel companies spoke dismissively of Airbnb, believing they were in different leagues. “And that was totally wrong because the customer actually wants it, and that's what's going to win at the end,” he said. 

To compete with Airbnb, he argued, the traditional hospitality model must recognize that while hotels may not be for everyone, everyone needs to be welcome.

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“What we can do that Airbnb cannot do is bring people together in common spaces [so they can] get those kinds of communal experiences,” said Lalvani. “The way we think about lifestyle and food and beverage and fun and enjoyment and debate and conversation—those public spaces are enabling us to do that where Airbnb can't.”

Still, he acknowledged, it would be naive to argue some travelers don’t want an Airbnb experience sometimes. “Myself, I'll stay in a hotel for certain reasons and I’ll stay in an Airbnb for other reasons. tt has to coexist and I think the convergence is going to going to start happening.”  

Companies like Barceló also have to find a balance between competing and cooperating with tour operators, especially those that, like Thomas Cook, operate their own hotels.

"On the one hand, we aspire to create better satisfaction for our customers," said Raúl González, CEO of Barceló. "That is business that we can do together." At the same time, he said, partnering businesses will always be looking to get a bigger piece of the proverbial pie. "I'm trying to make more money, and at the end of the day, I think that is how we can create value."

And then there’s the collaboration between branded and independent hotels, a line that gets blurrier with each launch of a soft brand. “The competition 15 years ago was dramatically different,” Ueberroth said. “And now all of the hard brands have gotten into our space. They've all launched a version of what we've been doing for 50 years. And then people say, ‘Does that threaten you?’ And I say, ‘No, it validates what we've been doing for a very long time, which is giving those hotel owners, operators, developers a home to go to [and] the flexibility to generate those and create those experiences that the traveler is really looking for.’”