HM on Location: Hotec Operations reinvigorates hospitality industry

SARASOTA, FLA. — The MICE space is scurrying back—one event at a time. Hotec Operations, which brings together senior executives of hotel and purchasing companies with suppliers for three days of prescheduled, one-on-one meetings and networking opportunities, floored for the first time since 2019, indication that a fuller recovery of the broader hospitality industry is afoot. 

The Ritz-Carlton, Sarasota was the site of this year's event, which drew more than 100 companies split evenly between buyers and vendors, all there to do business and create long-lasting industry relationships. 

The smaller, intimate affair that Hotec Operations provides trumps larger conferences and trade shows that don't allow for the same type of closeness, exclusivity and camaraderie. The setup of the event allows for unparalleled access to decision-makers in a relaxed environment.

A first-timer to Hotec, Paul Hitselberger, COO of First Hospitality Group, praised its effectiveness in facilitating business. "I love the speed-dating aspect. I much prefer going to this than a tradeshow. I would come again," he said.

Said Gina McKee, director of strategic sales for property management platform Cloudbeds, "Every time I've been to Hotec, I've been able to close a deal."

Beyond the meetings, attendees got to hear two keynotes. One was from Michael Clinton, former president/publishing director of Hearst Magazines. He is the author of "ROAR Into the Second Half of Your Life," which teaches those who are considering retirement or mid-career change, as well as those who have no wish to retire, to get on with fulfilling their dreams before it’s too late. 

The second day of Hotec Operations commenced with a data presentation by Shawn Grenley, senior account manager, North America for STR. Among an assortment of data points, one of the biggest stories in the market right now are room rates that are delivering strong top-line performance. "Average daily rates for hotels are actually above prepandemic levels," he said. "What makes that interesting is that every in other downturns throughout history, the first thing to come back was hotel room demand. So as occupancies at the hotels began to rise, that's when hoteliers felt more and more comfortable to then increase their ADR. We've actually seen the inverse of that this time. It's become more common knowledge that cutting hotel rates does not induce additional hotel demand. That's what revenue leaders have done."

Grenley and STR expect a full recovery in the hotel space, from a RevPAR perspective, in 2024.

Attendees at the Hotec event deal specifically in labor and the flow of goods—both of which are under extreme pressure and putting a strain on hoteliers and suppliers, alike. 

"Labor, freight, inbound shipping, I can't give you a timeline, but some of that may never bounce back," said Coleman Williams, corporate procurement manager, OS&E, MRO and facilities, at Omni Hotels & Resorts. "Hopefully, some of the supplier pricing comes down, because eventually the labor will come down, too."

Williams thinks that will be in the next six to 12 months. "But some of the supply-chain issues, people think they are getting better, it's actually the opposite and getting a bit harder. The nice thing about this country is we will find a way to get it here."

The cost pressures on hotels are omnipresent and not abating at a rate hoteliers hoped for. For Kendra Plummer, founder of hotel investment firm Elise Capital, identifying cost inflation is the first step to managing the profit and loss statement effectively and "figuring out which costs will make or break our hotels," she said. Labor, she noted, is something the industry needs to keep up with to have the best quality and keep guest satisfaction and employee morale up. Other types of cost inflation, like linens and towels and other goods, need to be scrutinized. "Finding new vendors and getting things priced out again so we can be as competitive as possible," she said. "Keep the quality, of course, but not overpay for it."

Del Ross, chief revenue officer of Hotel Effectiveness, sees technology as a way to assist the labor morass. "The labor market is not getting bigger; we don't have enough workers and that's not going to change," he said. "Hospitality can become the chosen place to work, but at the end of the day it's a math problem. Tech can do the math for you—productivity guidelines that are math driven and create schedule templates that fill actual need and eliminate waste. High labor costs make waste untenable. Technology makes these complicated decisions attainable."

At the property level, the labor strain is real and a constant headwind for hoteliers, but Walther Lauffer, VP of hospitality at Aquilini Properties, sees smoother sailing on the horizon. "The last number of years have been trying. We've had many employees that went through hell and back that did many different jobs they didn't sign up for," he said. "But now, there is an expedited recovery, supply-chain issues remain and are exaggerated, but at least there is some recovery and money back into the hotels that makes all the hard work we've done more manageable."

Like STR's Grenley mentioned in his presentation, healthy daily rates are delivering positive results for hoteliers, even in the face of lower occupancies and expense creep. Lauffer is confident of a full recovery by end of 2023, start of 2024. "We'll be there soon," he said.

Hotec Operations 2023 will take place June 12-15 at the JW Marriott Scottsdale Camelback Inn Resort & Spa, in Scottsdale, Ariz.