Hotel Management spoke with Lara Latture, the COO and principal of The Hotel Group Holdings, on what prepared her for her position in the industry, the greatest challenges facing hotels today and more.
Hotel Management: What prepared you professionally in your journey from director of sales at a Holiday Inn to COO & principal at The Hotel Group?
Lara Latture: I ask myself that same question often and the answer is that most days, I am still preparing. When I came to work for The Hotel Group 18 years ago as director of sales, I knew I could rise to the occasion at a beachfront property, and all of the challenges that come with that, yet still had my doubts. Later, when I was asked to become the general manager of the same hotel, I was just as convinced I wasn’t ready! Luckily, I am not a person that will fail for lack of effort. In the end, I met a regional manager named Doug Dreher, believe it or not, over a very heated conversation about telephone revenue! It was during that same conversation, one or both of us decided we may be a good team. Almost 20 years later, I am still learning from those conversations with Doug and my other partners. Occasionally, they may even say they are learning a little something from me!
HM: What are the biggest trend lines facing hotel operations in 2016?
LL: Excess new inventory is coming into markets across the country. In many areas, demand is already beginning to flatten out to prior year. This will eventually lead to [average daily rate] erosion as competition for roomnights increases. Although minimum-wage ordinances have not come into play everywhere, it will only continue to have a significant impact on several markets. Although there can be creative ways to mitigate this from heavy impact to profits, some hoteliers will have their hands tied for various reasons and the only solution will be to reduce other expenses and raise prices to offset the burden. Although new advances in mobile check-in, kiosks, etc., are a convenience for many business travelers, less tech-savvy travelers may not appreciate it. The potential for personalized face-to-face service interactions will be greatly reduced. Lastly, brands continue to make progress in shifting booking habits of guests by going directly to the hotels themselves, thereby cutting out third parties and their commission fees.
HM: What is the true value of a hotel brand in 2016, and what are they bringing to the table for hotels?
LL: One of the most important benefits is a proven identity in a sea of rooms! You can never be “dark” in the world of selling room nights. People have to be able to find you, and with the Internet being the “primary” vehicle in all regards of our business, which encompasses everything from the reviews of your product, your staff, how to find you, what to expect when they arrive, qualitative comparisons, and on and on, you need to align yourself with a brand that people trust. Additionally, brand efficiencies are always evolving. The key to brand relationships is that everyone needs to win; the only way that happens is when both the owner/operator and the brand truly partner on decisions and at times, mandates.
HM: What are the biggest concerns facing owners right now, and what must they do to succeed?
LL: Shoring up the cap-ex side of the hotels. Product quality is most essential considering the wave of new supply entering many or most markets. In the end however, to succeed on the ownership front is to ensure you have a best-in-class management company running your hotel(s), focusing on all the disciplines of our business, which is more competitive than ever before. We have to earn our business and loyal guests each and every day—which is only accomplished through inspired, hospitality-oriented people. As we say at THG: “Great people make the difference.”
HM: How is The Hotel Group preparing for the uncertainty of 2016, and what are its goals for the year?
LL: We opened four hotels last year, have six under construction and another two signed up in the pipeline. We are laser focused on successful openings this year, as well as ramping up those that recently opened. We are working on selling a few of our owned assets as well as working with management partners on a handful of a few others. We recently completed a significant refinance of an owned hotel, and are evaluating others that could benefit from refinancing in anticipation of rates increasing and underwriting becoming more challenging, as well as new rules forthcoming in [commercial mortgage-backed securities in the] latter half of ’16. We are shoring up the product side of the portfolio and have a number of large renovation projects under way, including a strategic conversion of an owned asset. And we have ramped up the team even further (now 50 corporately—a high-water mark), and have also recently announced internal promotions for many of our well-deserved teams.