1 HM: Looking into your crystal ball, and with everything you’ve seen in 2013, how will the hotel industry fare in 2014 in terms of overall operating metrics and profits?
TM: Hotel owners who migrate to low-cost operating strategies will be the winners in this no-growth era. Historically, we could always count on increasing rate and occupancy to drive growth. However, average global hotel prices rose 2 percent in 2013 against an inflation rate of 2 percent. And it took seven years to come back to this present level. For hotels operating in the vast midscale and economy segments, any market-driven incremental growth will be far outweighed by top-line franchise fees and rising operating costs.
2 HM: Most pundits are predicting healthy growth for the industry over the next three years, but what out there (government or otherwise) has the possibility to upset this optimism?
TM: The data Magnuson Worldwide aggregates from the 200 countries we operate within indicates that true growth rates have leveled, and this flattening is now a long-term trend. Historically, highest growth has been the domain of the developed countries such as the U.S., Europe and Asia, but now there are more developed countries. Implemented properly, the average U.S. hotel could increase operating profits by at least 30 percent, even in this stagnant economic environment.
3 HM: In regard to how you handicap 2014, what specific or significant goals have you set for your company?
TM: Our biggest goal is to help hotel owners get back to the hotel business, rather than be overwhelmed by the complexity of managing distribution, OTAs, GDS, reviews, social marketing and revenue management.
4 HM: Technology and social media play major roles in the hospitality industry today. What is your company doing on those fronts to stay ahead of the curve?
TM: We have yet to see any industry-wide monetization from the use of Facebook or Twitter; however, we do see a direct correlation between review scores and pricing power. To help our hotel owners stay ahead of the curve we are focusing on two control levers—price and review scores.
5 HM: Developing new markets is always top of mind. In 2014, and beyond, where are you concentrating on for growth and expansion?
TM: Our growth focus for 2014 and beyond will be focused on growing representation services for independents and growing the Magnuson brands.