This week, hotel CEO after CEO at Skift’s Future of Lodging Forum talked about incredible financial performance, with demand increasing and no end in sight.
“Our NYC hotels are running 98% occupancy at big rates,” Tyler Morse, CEO of owner-operator MCR Hotels said. “We’re raising those rates – and we’re raising wages. There’s plenty of money out there.”
Highgate CEO Arash Azarbarzin agreed. “We don’t see a recession coming.” Across their 540-hotel portfolio, demand and pricing power are higher than ever.
The reason? “People want to travel and there’s not enough supply,” said Steve Hafner, CEO of Kayak.
What does this mean for hotel operators today?
Adjust your booking policies
Maybe take a page from the airlines. “The airlines charge in full upfront,” Morse pointed out. “Why the hotel industry gives free options is beyond me.”
Sell more by learning more about your guests
“Guests’ willingness to pay is significantly higher than we think it is,” said Jason Bryant from Oracle. “As you learn more about your guest you have more opportunities to offer more to them.”
For Starwood Capital Managing Director Robert Tanenbaum, tools like QR codes can speed up the buying experience but can turn hospitality providers into just order takers. “We need to look for opportunities to serve, engage, and (maybe) upsell something they’d like.”
Learn from short-term rentals
According to Sojern, the annual summer vacation is turning into a month-long trip for many. How does that affect your offering?
Leading hotel investors such as Pebblebrook are taking design, service, and amenity inspiration from short-term rentals. “It’s the laboratory of the hotel industry,” said Skift Senior Research Analyst Seth Borko.
While hotel operators can learn from short-term rentals, guests will increasingly demand more certainty, said Evolve CEO Brian Egan.
“Suppliers that provide certainty in the quality of the guest experience will be rewarded financially, and those that don’t provide that will lose. Standards matter.” But certainly doesn’t mean conformity. “Unique spaces and services are the past, present, and future of the hospitality industry,” he said.
Maximize returns with technology
“The goal of an operator is to maximize risk-adjusted returns for the owner,” Life House CEO Rami Zeidan shared. “Our goal is to maximize profitability, and the reliability of that profitability. Software is our competitive advantage.”
Recruit from other industries
citizenM’s Chief Growth Officer Ernest Lee shared the company is looking to industries with talent that most hospitality brands overlook.
Standard Hotels CEO Amber Asher is doing the same, focusing on recruiting from the fashion, music, and PR industries.
For AutoCamp CEO Neil Dipaola, it’s former camp counselors and people who love the outdoors. But it needs to be the right type of person – someone who exudes a spirit of hospitality. “We want them to show the heart of the innkeeper in caring for others.”
Don’t take guests for granted
Times may be good, but Azarbarzin had a note of caution. “Don’t ever take your guests for granted. They might not complain, but they won’t come back. When a hotel becomes a commodity, it loses its value and connection with the guest.”
Pay it forward
“Paying it forward is so important in our industry,” Tanenbaum said. “We need to be looking for ways to give back to our communities in times of plenty.”