Hunter Conference focuses on moving forward

ATLANTA — After a year’s delay, the 32nd Hunter Hotel Investment Conference kicked off on Monday at the Atlanta Marriott Marquis, one of the first major in-person industry events to return since the pandemic began. 

Lee Hunter, chairman of the conference and COO of Hunter Hotel Advisors, kicked off the opening general session by acknowledging the challenges the industry has weathered over the last year, and the losses each of the attendees has had to face. Given all the struggles, he said, he would have been happy to have 400 industry professionals at the conference. Instead, 1,100 attendees are here in person, he said, and many more are tuning in remotely. Roughly 40 percent of the participants are owners and investors, he added, and guessed that 20 percent of the people in just one of the ballrooms were first-time attendees. 

Winding Road to Recovery

Tourism Economics President Adam Sacks shared some statistics that offer the industry reasons for hope—and for caution. Economic recovery, he said, is inevitable, but it will likely be complex and difficult to follow. In November, only 39 percent of travelers said that they felt safe traveling outside of their community. As of Tourism Economics’ latest data from the end of April, that number has grown to 60 percent, up from 55 percent in March. 

Successful vaccine rollouts have driven down both hospitalization and death rates, setting the stage for a peak summer travel season. President Joe Biden’s economic stimulus package and infrastructure investment plan also could help drive travel during the second half of the year, Sacks said. The latest numbers from Destination Analysts that found 90 percent of U.S. travelers plan to travel in the next six months, up from 57 percent a year ago. 

This year, Tourism Economics expects the industry to reach 82 percent of domestic travel volumes and to be “just about fully recovered” in 2022. International travel, however, might not fully return until 2024, he cautioned. Corporations are planning to resume business travel, he added, citing Global Business Travel Association data that about 80 percent of businesses are planning to send workers out on the road again within the next several months, compared to 10 percent in January.  

“There's no single answer to how  the travel industry is recovering because it depends on what travelers you're talking about, where they are staying and how they are getting there,” Sacks said. 

The lodging sector has traditionally been a “much faster” creator of jobs than the rest of the U.S. economy, Sacks said. Over roughly 30 years, lodging sector employment has grown 38 percent while the country’s total employment has grown 29 percent. “But what's happened in the last year is that lodging sector employment has been brought back 30 years,” he said. More than one in four—27 percent—of hospitality industry jobs has been lost as of April, and the unemployment rate within the lodging sector is at 13.8 percent compared to 6.1 percent in general. While demand may be on the rebound—especially in resort and leisure markets—hotels will have a hard time catering to returning travelers without a trained staff to support them. 

The C-Suite Talks Leadership

While the numbers look promising, Chip Rogers, president of the American Hotel & Lodging Association, noted that the road back will be long. “Just because people are going on pent-up demand vacations doesn't mean the industry is back to where it was,” he told the crowd during a panel of senior leaders. Last year, he estimated, the U.S. hospitality industry lost about $110 billion. “Even in the best-case scenario, this year, the industry's probably going to lose $25 billion.” 

As hoteliers faced reduced income as travel dried up, companies had to make difficult choices to keep brands and properties afloat. “Our goal at the company was to help our hotels survive from the get-go,” said David Kong, Best Western Hotels & Resorts president and CEO. The company launched a fee relief program that initially amounted to about $30 million. Today, the program has saved hotels from paying about $65 million to the parent company—but the leadership team is still making tough decisions to help the most people possible. “I'm sure many of you here have had to do that—try to put up a brave face on the outside but inside you’re shredded to pieces because you’re making decisions for people that have been with you for a long time,” he said. “That was very, very hard.” 

Marriott International has “fine tuned” its demand generation channels, digital marketing and its Bonvoy Escapes loyalty program to generate a "huge amount" of incremental revenue for its hotels, said Liam Brown, group president for the U.S. and Canada at the company. “The extended-stay brands are doing particularly well and continue to improve week over week over week,” he added.

Jim Alderman, CEO of Radisson Hotel Group Americas, said his team began seeing longer booking windows as confidence improved week over week and month over month, with reservations for June being made in April. “Postponed weddings are coming back, and fall bookings for groups,” he said. “Small and medium sized corporate travel has come back.” 

Carlos Flores, president and CEO of Sonesta International Hotels Corp., agreed. “The inquiries are through the roof,” he said. “We're in a great position, and I hope that we're back to 2019 levels sooner than later. But we still have some work to do.” Since October, the company has hired more than 5,000 people, reflecting its rapid growth over the last year. Even people who have been with the company for years and have kept their titles find their jobs to be “bigger and contributing more value.”

That value extends to the hotel level, where owners and operators alike are facing a severe labor shortage and are faced with raising wages. Alderman suggested managers should ask staff to not wear their uniforms off-property in case they get poached to a competing business while waiting for a bus. While ghost kitchens can minimize the number of people needed to operate a take-out restaurant, there is no such thing as a ghost hotel, he said. Kong, meanwhile, suggested offering workers a retention bonus if they remain past a certain date, giving them an incentive to stay with the team. 

Hoteliers have a lot of "creative" options available to solve problems, Brown said. "We've just got to be ahead of it." Demand returned faster than many hoteliers expected, putting leadership at both the hotel level and corporate level in a position of fighting metaphorical fires daily. "Perhaps have not had the right tools, locally, to be able to figure this out," Brown said.

“At this point, it's about recovery,” Kong said. “At this point, it’s about maximizing the market share of our company. So you’ll see a dramatic push to sales and marketing.” Next week, he added, Best Western is set to launch a big ad campaign. “We're going to have very rich promotions out there, and we're stepping up on our sales efforts.”