At the 23rd annual Americas Lodging Investment Summit, being held this week at the JW Marriott/Ritz-Carlton Los Angeles L.A. Live, approximately 2,000 attendees gathered for the year's first lodging industry event.
The "State of the Travel Industry" was the first panel on the docket, moderated by Geoff Freeman, president and CEO of the U.S. Travel Association. Danielle Bozarth (senior partner, McKinsey & Company), Christine Duffy (president, Carnival Cruise Line), Bill Hornbuckle (CEO & president, MGM Resorts International), and Peter Kern (vice chairman & CEO, Expedia Group) shared their perspectives.
The USTA released a report last week that showed that the U.S. is ranked 17 of the top 18 local destinations in terms of competitiveness, Freeman noted. "Travelers are not choosing to come to the United States, while other countries like Canada, [the] U.K. and even China are putting in place policies to be far more competitive when it comes to attracting travelers."
“We have certainly come a long way since the pandemic. We're heading into 2024 in a better position than we've had in the history of our company,” Duffy said. “We've been able to push back a booking curve and open up more inventory earlier. I think today people see the value of cruise relative to man-made vacations is pretty significant.”
"We do quite regular consumer work, asking folks where they're going to be spending their money," Bozarth said. "We continue to hear people saying that they're excited to travel. "There continues to be a shift in their spend from products to experiences."
The Elephant in the Room
Freeman referenced "the elephant in the room: there might have been a little bit of tension between the OTA community and the hotel community." Given that the CEO of an OTA now sat on a panel at ALIS, he asked Kern what the state of that relationship is today.
"Of course want to sell your product as much as we can for you," Kern said, "but we've become a technology provider and become a way to get supply—the hotel or movies or anything else—into more hands. We've done a lot of work to really change what our role is—how we buy technology, and even how we try and find solutions to industry-wide problems like wholesale rate issues. We believe in bringing a new sample of customers to a hotel chain resort. And that gives all of you as owners, of all industries, a chance to retain the customer. We feel like we do a really good job of bringing customers into the pool."
Duffy added that Carnival has invested a lot in technology to identify ways to encourage customers to open their wallets prior to ever boarding a ship, whether that's booking shore excursions or spa appointments, for example. "A lot of it has been about reaching consumers in a way that reduces friction and waiting in lines. It makes for a better experience overall."
Digitization
Hornbuckle said that the pandemic changed the profile of the Las Vegas consumer, and that digitization of the business has been critical in bringing Las Vegas to the consumer, specifically through sportsbetting. "We've reached millions of customers in the last four years. We've [created] something from nothing. And if you think about Las Vegas as a destination, while we have frequent visitors, the average interaction comes every two years. So it's best we can create a product with a reach to a younger demographic with our product in their hand, [which] starts to create this omni channel."
Bozarth shared some trends she was seeing, particularly in airlines and travel: "We're seeing a lot of frontline interventions happening at this point in time. We're seeing folks using a lot more frontline tools. We're finding that counseling and training actually look very different than they used to. It's going to be much more predictive. We're also seeing a ton of deployment of improved operational tools that help people predict where problems are going to happen. And they get to meet with customers before they do. It's quite powerful. I think there [are] some learnings for all of that in this industry. One other area is an agility around assets. We're seeing folks be very focused on how they make their assets as agile as possible."