NEW YORK — Several panels at the 43rd annual NYU International Hospitality Industry Investment Conference brought the heads of major industry businesses together to discuss the latest trends facing hoteliers.
During “The CEOs Check In: A View From the Top” panel on the first day of the conference, outgoing BWH Hotel Group President and CEO David Kong cited the U.S. Bureau of Labor Statistics report that of the 4.3 million Americans who quit their jobs in August, approximately 892,000 were within the restaurant and hospitality industry.
“There are many reasons for it,” Kong said of the Great Resignation, noting that COVID-19 changed the way people work and what they expect. “Some people just got used to working at home and they don't want to go back to the office.” That presents a challenge for jobs that cannot be done remotely—such as in hotels.
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“We don't know the recipe as of yet,” Accor Chairman and CEO Sébastien M. Bazin said of the solutions to the staffing shortage, but he suggested wages and flexible schedules would be a good place to start. “There's nothing worse than having great demand [but] inability to serve,” he said.
Marriott International CEO Anthony Capuano said the job losses within the hospitality industry have eroded confidence in the sector’s ability to provide stable, lifelong careers, which can dissuade people from applying. “It's incumbent on us—incumbent on everybody in the room—to tell the story of what a terrific set of industries it is and how easy it is to build a really productive career.”
Christopher J. Nassetta, president and CEO of Hilton, agreed with that call to action, but noted that while the people currently employed in hotels are doing a good job, the challenges of the past two years have “created a heavy degree of PTSD” and are forcing workers to consider what they want their futures to be. “While I still believe in the power of hospitality and I still believe that we are an amazing engine of opportunity, our company, everyone represented up here and in this audience—we're gonna have to work harder, even harder than we were working to make sure that we get the word out.”
IHG Hotels & Resorts CEO Keith Barr called for more innovation in the food-and-beverage sector and in the use of technology to drive positive guest experiences. But the first priority, he said, is to bring people back into the workforce.
Current Trends
The second day of the conference kicked off with “Industry Leaders Discuss Current Trends Shaping the Future of Travel and How to Capitalize on What’s Coming Next.” Jim Alderman, CEO of Radisson Hotel Group, Americas, said that guests are increasingly demanding, putting pressure on each hotel to do more with fewer team members. “Unlike we did in the Great Recession, we held [average daily rate], and that does not make a friend of a guest. If you held ADR but you haven't brought everything back, in most cases it’s because you can't.”
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Jeff Wagoner, president and CEO of Outrigger Hospitality Group, agreed, noting that the company had budgeted for 70 percent of its occupied guestrooms to have housekeeping services each day for 2021. “And then we found out, before the year even started, that there was a 90 percent take rate for housekeeping,” he said. “We saw the surveys, we heard the chatter about what was going to happen, and it really didn't materialize. ... The consumer came back and said, ‘I really want those services in a resort environment.’”
Margaritaville CEO John Cohlan agreed, noting that the brand or type of property can determine what guests expect: “You can get creative and you can drill into the areas of expectation that are not as limited by some of these external forces.”
Sloan Dean, CEO and president of Remington Hotels, suggested that technology could help improve the balance between guest expectations and reduced staff. “You can do mobile key at the front desk—and we've seen high adoption of that—and you can do mobile order and pay in food and beverage. I think they're so used to the technology that it will modify the way we operate.”
Carlos R. Flores, president and CEO of Sonesta International Hotels Corp., emphasized the need for communication between hotel and guests to keep expectations in alignment with capabilities. “These are lessons that predate the pandemic itself,” he said, noting that guests at the company’s extended-stay properties did not understand the typical housekeeping schedule for the segment, causing frustration for all parties. “Regardless of which customer segment, which property we're talking about, it's a reminder of the importance of really communicating. We have a responsibility to educate [them on] what they're really stepping into.”
The Leaders Check In
That panel was followed by “The Leaders Check-In – Part Two: Consolidation, Scale, and the Structure of the Hospitality Industry,” which brought more CEOs and presidents together to discuss what long-term changes we can expect going forward.
Geoff Ballotti, president and CEO at Wyndham Hotels & Resorts, noted that Thursday nights, Sunday nights and Monday nights are the top three nights of occupancy growth, indicating stronger demand for business travel.
Elie Maalouf, CEO, Americas, IHG Hotels & Resorts, noted the growth in road trips during the height of the pandemic shifted where people wanted to go. “There are not only 50 states, there are 3,140 counties in the country,” he said. “I think Americans over the last two years have discovered many of them that they didn't know before, and they're going out and doing things. Yes, leisure’s New York, Miami, L.A., the [Florida] Keys, but it's also everywhere else.”
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Stephanie Linnartz, president, Marriott International, said that the growth of leisure travel is here to stay, with the upcoming Thanksgiving and Christmas holidays poised to outpace Labor Day—“which says a lot because for us, Labor Day was twice the [revenue per available room] of the year before.” Group business bookings for 2022 are actually better than 2019, she added, and the rates are higher. “We all thought business transient would come back before group, but group is coming back faster,” she said. While technology has made connecting and keeping in touch easier than ever, it does not replace face-to-face business. “Group has been a bright spot and will continue to be a bright spot,” she said. Still, she acknowledged, business travel may decline between 5 and 15 percent as shorter meetings move to the virtual space.
Michael J. Deitemeyer, president and CEO at Aimbridge Hospitality, agreed with Linnartz’s optimism, noting that Aimbridge has chosen to do business with consultants because they showed up in the office. “The reality is you will travel … if your competitors are doing it, the people are meeting with them and that's where it's going,” he said.
Patrick Pacious, president and CEO of Choice Hotels International, noted that business travel can include construction workers and emergency relief professionals who rush in to help after a disaster. “These are folks who were still traveling in April of last year,” he said, calling those early days of the pandemic a “magnificent laboratory” to prove who is on the road “when the world goes to hell in a handbasket.” The recent passage of the infrastructure bill in the House of Representatives will be a 10-year-long investment that Pacious expects to drive this type of business traveler.