Virtual NYU: CEOs predict next steps

Moderated by CNBC’s Sara Eisen (bottom), the session featured (top left to right) Keith Barr, CEO, IHG; Sébastien M. Bazin, chairman and CEO, Accor; and Tony Capuano, CEO, Marriott International; and (second row, left to right) Mark S. Hoplamazian, president and CEO, Hyatt Hotels Corp.; David Kong, president and CEO, BWH Hotel Group; and Christopher J. Nassetta, president and CEO, Hilton. (NYU SPS Jonathan M. Tisch Center of Hospitality)

On Monday, the NYU School of Professional Studies Jonathan M. Tisch Center of Hospitality kicked off a two-day webinar series examining the industry’s next steps as the world emerges from the pandemic. 

The "CEOs Check-In" panel was moderated by Sara Eisen, anchor of CNBC’s “Closing Bell,” and included leaders from several of the biggest hotel companies. While all of the CEOs expressed optimism for the future, that optimism was tempered by slowing vaccine rates and lingering closed borders that are hindering travel. Europe, said Sébastien M. Bazin, chairman and CEO of Accor, is “just waiting to get our act together.” While the 27 European Union member countries are still dealing with the crisis in different ways, Bazin expressed hope that the European borders would be open by June 9. Half of Accor’s bookings are made less than four days in advance, he added. “And I cannot tell you how much it does vary from one week to the other.” 

Optimism is directly tied to vaccination rates and government policies, said Keith Barr, CEO, IHG Hotels & Resorts. “When you look around the world—as Sébastien was saying—you see a market open up, and you see that surge in leisure demand and then you see a market closed down or you see air routes closed down or so forth.”

“We will all have the best leisure summer we have ever had in the history of the business,” said  Christopher J. Nassetta, president and CEO of Hilton, although he acknowledged different segments would recover at different rates, with business travel taking longer. The industry as a whole will probably reach 2019 numbers again in 2023, he said.

Tony Capuano, CEO of Marriott International, was more bullish on business travel returning. “It is impossible to cultivate these relationships via technology,” he argued. While some businesses are making do with hybrid or virtual meetings, they are much more willing to travel if they think their competitors will have an in-person advantage. “Their quick response is, ‘Oh, well, then all bets are off and we're right back to traveling the way we were prepandemic.’” Marriott  also is seeing improved pricing power, he noted: Over Memorial Day weekend, Marriott’s average rate across the whole U.S. resort portfolio was up 35 percent over the same weekend in 2019. 

Mark S. Hoplamazian, president and CEO of Hyatt Hotels Corp., noted the industry’s acute labor shortage. “We didn't, historically, really compete head-to-head with retail or logistics and distribution centers,” he said. “But we are now, and we've got to approach [labor] differently.”

David Kong, president and CEO of BWH Hotel Group, agreed, saying that the issue has gone from challenge to crisis. The industry is facing several headwinds in terms of this crisis, he said: “First of all, last year, we all laid off tremendous numbers of people. [Today], people don't feel safe being in our industry. They don't feel that job security. Secondly, you have the likes of Amazon that are building up big plants and you’ve got the economy that's very, very strong powering a lot of other industries ... and that bodes well for the business segment, but it also takes jobs away from the hotel industry.”