HM on location: Responsible travel topic of Skift Global Forum

Hilton President/CEO Chris Nassetta talks with CNBC reporter Seema Mody at the Skift Global Forum. Photo credit: Hotel Management/Jena Tesse Fox

NEW YORK—“Travel is the world’s largest industry. Let’s start acting like it," Skift Founder/CEO Rafat Ali told an estimated 1,000 executives representing more than 450 travel-related companies as the sixth annual Skift Global Forum kicked off in Manhattan on Wednesday.

The speakers during the first day of the conference represented hotels, technology companies, cruise lines, airlines, OTAs and booking platforms. And while the businesses were diverse, one consistent theme emerged throughout many of the brief sessions of the opening day: “What is travel’s responsibility to the world?”

The Value of Accessibility

The responsibility to make travel accessible to everyone was highlighted in an early session. Approximately 1 billion people around the world live with accessibility issues, Mobility Mojo CEO Stephen Cluskey told the attendees, and this number will only grow as Baby Boomers get older. By 2020, 25 percent of the total tourism market will be made of those with higher accessibility needs.

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One of the bigger hurdles to accessible hospitality, said Cluskey, who has used a wheelchair since breaking his neck in a accident as a teenager, is convincing hotels that accessible spaces are more than a legal requirement, but an advantage that can boost revenue. People with accessibility needs will often stay longer, spend more and bring a larger entourage along with them when they travel; however, if they can’t determine how accessible a hotel is, they’ll look elsewhere, he said, noting If a hotel promotes itself as accessible, it will attract that business. 

Cluskey estimated a full half of all people with accessibility challenges simply stay home and don’t travel at all. “That’s half a billion people globally,” he said. The cause of this hesitation, he added, is simple uncertainty. “It’s a black hole of not knowing what to expect.” Accessible bedrooms are the second-most searched-for amenity after wi-fi, he said, but few hotels promote themselves as accessible or go into detail on what guests can expect. “Imagine how many untaken trips, unseen cities, missed friendships, missed business opportunities [we’ve faced] because we failed to fully inform travelers,” Cluskey said. On the flip side, he encouraged attendees to imagine the “ripples” of promoting accessible travel and hospitality.

Growth and Profits

Months after the company celebrated its centennial, Hilton President/CEO Christopher Nassetta shared an update on how Hilton is faring and offered some hints about what might be ahead.

Hilton launched three brands in the last year and Nassetta suggested “a few more” may be coming in the not-too-distant future.  

“I remain reasonably optimistic that the U.S. economy is in decent shape and will stay in decent shape at least for a period of time,” Nassetta told the attendees. “The housing market's reasonably good; the jobs market is as good as it's been in 50 years; corporate profits are maybe not growing at the same rate, but are very, very strong; liquidity is strong; [and] savings rates are up.” That said, he added, “It is hard to argue that we are not towards somewhere in the later stages of what has been a very prolonged cycle of growth.”  

The centennial year hasn’t been all good news, however, and CNBC interviewer Seema Mody asked Nassetta if, following the company’s disappointing Q2 numbers for its Chinese hotels and the ongoing trade conflict with the country, Hilton was experiencing anti-American sentiment among Chinese hoteliers or guests. “I have not seen that in any way, shape or form,” Nassetta emphasized, but cautioned that with the Chinese economy slowing, he said, same-store growth in the country will be lower than in recent years, and fewer new units will open. 

During the conference, Nassetta touted Hilton had been named the global industry leader in sustainability for the third consecutive year on the Dow Jones Sustainability Indices. “We’re hyper-focused on sustainability,” said the CEO, adding the company has set “ambitious” goals that line up with the Paris climate accords to halve the company’s environmental impact and double its social impact by 2030. 

Climate change is affecting destination appeal, he said, in the sense of where hotel companies want to build and how they establish standards for both construction and maintenance as hurricanes and extreme weather become increasingly common. “I do not think they will become uninsurable risks,” he said about coastal hotels. Standards developed after hurricanes struck Miami, he added, have become standard in the ensuing two years and have helped make coastal hotels safer. 

When asked what worries keep him up at night, Nassetta assured the crowd that he sleeps like a baby: "I sleep for two hours, wake up and cry myself back to sleep for another two hours." 

Subscription Service, Vacation Rental

Inspirato Founder/CEO Brent Handler explained that his team negotiates packages with luxury hotels and home-rental services for passholders to book. Its newly launched Inspirato Pass offers unlimited trips (with some caveats) for $2,500 per month and a minimum six-month commitment and since the package price is not visible to the traveler (it’s all included in the $2,500 per month membership), the guest won’t try to shop around for a better price with another OTA, he indicated, noting the opaque pricing does not allow guests to see what the hotel’s nightly rate is.

The system lets high-net-value travelers feel like they’re getting a deal while luxury hoteliers can get heads in beds without letting the public see a lower room rate. Currently, Handler said, the platform has several hundred hotels and rental homes available. “We’re creating new relationships with hotels and also working with wholesalers. The more partners we bring, the more value we have.” 

Branded vacation rentals are also increasingly popular, and businesses are spending big to get in on the action. In July, American vacation rental management platform Vacasa signed an agreement to purchase Wyndham Vacation Rentals from Wyndham Destinations for approximately $162 million. The purchase boosted Vacasa’s portfolio to more than 23,000 homes across North America, Central and South America, Europe and Africa. 

“Wyndham has some of the nicest homes out there,” Vacasa CEO Eric Breon told the audience. “What they don’t have is a tech platform to bring it all together, and that’s something we had already invested in.” The deal brought Vacasa to a total of 18 countries, Breon said, and he is particularly excited about the company’s growth in Mexico and the Caribbean. Prior to the acquisition, Vacasa’s growth was 70 percent organic and 30 percent M&A, Breon estimated, but that is changing. Growing in new markets organically “could take years,” he noted. “If we go and buy a leading company in that market, we hit the ground running.” 

“There’s a tremendous appeal for what we bring,” Breon said of Vacasa’s model, adding home rentals have become so popular that a “majority” of people purchasing second homes are doing so with plans to rent. 

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