If you are like me, then the New Year’s celebration is not a time to plop down hundreds of dollars to drink mediocre Champagne and feast on uninspired finger foods. Of course, it is not: It’s to sink into your sofa, grab your favorite beverage, fire up your TV and flip to the SyFy channel to gorge on the annual “The Twilight Zone” marathon. Nothing gets my juices flowing like a Rod Serling voiceover and old-school black-and-white programming on a 4K smart TV.
Now, some episodes are better than others, of course: “The Howling Man,” “The Eye of the Beholder,” “Will the Real Martian Please Stand Up?”—to name only three. For the purpose of this first column of 2017, I’m going to reference “A Most Unusual Camera,” an episode that originally aired on Dec. 16, 1960 and is based on the conceit of a clairvoyant camera. Snap a photo; see the future of it.
If we had the “unusual” camera in hand and took a photo of the hospitality industry right now, we might get in return a picture of calm, but the image might be a tad blurry. The hotel industry is moving along at a steady rate; no, it might not be at a 5-percent clip as in previous years (we were spoiled), but there is no regression here: Hotels are being built, new brands are popping up and advances in technology are reshaping the guest experience.
The fuzziness comes because we are tentatively in the dark about President-elect Donald Trump’s imminent new policies. Turns out, Trump’s polices are likely to benefit the hotel industry because the pro-business Trump’s agenda should be fraught with deregulation, a roll-back of Obamacare and lower corporate taxes. These are all things that should help small businesses (franchisees) and global hotel companies (franchisors).
If we again used the “unusual” camera to take a picture of a hotel with its owner next to it, chances are it would remain the same. Interest rates are rising (most—brokers and buyers—say the impact is negligible), and that’s strong evidence that the U.S. economy is only getting stronger. That means it’s time to invest back in your asset. Downturns typically mean cuts to capital investment, but as the economy picks up, which it has of late, paired with a bull market, capital-investment spending should follow, sidestepping the risk of being eaten up by the competition.
2017 will be a strong year for travel. But the prevailing notion is that the gap between demand growth and supply growth is shrinking, and is therefore a hindrance to occupancy growth. The only thing left to drive is rate, which operators should make a priority in 2017—and with all those capital improvements, that’s all the more reason to jack up room rates, right?
With film running out, my last “unusual” photograph is saved for Airbnb. And when I take it, my hope is that while I know it will still be there, we will talk less about it. Understandably, the business of home-sharing is not going away. But it’s merely another source of supply, albeit a gargantuan source. Still, the likes of Airbnb are not going to replace traditional lodging; I am convinced of that.
Until home-sharing was commercialized, did we give it this much airplay? I get it: It’s the new kid on the block with the shiny new bike. Don’t get distracted. You, hoteliers, have something they don’t: real customer service. But you can’t get complacent. While technology makes your job and your staff’s job easier, it can get in the way of real human, unscripted interaction. That is still what travelers want and enjoy—no matter if they are a millennial or a boomer.
I’m confident of that, and you should be, too.