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Ringing In The New Year

Lodging Industry Resolutions That Can Help Make 2018 Successful

Tuesday, January 02, 2018
Dennis Nessler
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As we ring in 2018 the holiday season is now officially behind us and it’s time to look toward the year ahead for the lodging industry. On a personal level, it’s that time of year for New Year’s resolutions and hopefully yours are still intact. (If not, you might need to take a good long look in the mirror as it’s only January 2.)

But I’m going to put the personal goals and objectives aside for now and put forth some resolutions that I think would make for a better hotel industry in 2018 and beyond.

First, let’s see if we can get through the next 12 months without any new brands. Of course, this request probably won’t even last through the ALIS conference later this month but I can dream. The reality is supply has been ticking up steadily throughout the country with a number of top 25 MSAs already oversaturated. Supply will officially be outpacing demand nationally this year. In addition, we need to consider that consumer confusion—not to mention those of us in the industry at this point—regarding brands is at an all-time high. Please don’t roll out another brand for a subsection of consumers that aren’t having their needs met. Anyone who can’t find a suitable hotel brand these days simply isn’t looking hard enough. Let’s call it what it is: large hotel brands trying to get more dots on the map by avoiding impact issues with existing franchisees.

Another resolution for the industry should be to stop complaining about the home sharing industry; it’s not going anywhere. Yes, we can argue for the regulation of the home sharing industry to “level the playing field” and the AH&LA has fought tirelessly for it. But I think more effort needs to be put into understanding the Airbnb guest, for example, and what drives their decision making, as well as how these platforms can ultimately complement the more traditional hotel stay.

As the saying goes, if you can’t beat them join them. Some of the large brands, including Marriott International and Hyatt Hotels Corp., have been dipping their toes into the home sharing pool by investing in such platforms. I would expect to see more of this from hotel companies going forward. Similar to the emergence of the timeshare industry a couple of decades ago, the more the big brands get into this segment of the business the more legitimate it will become.

Another thing I’d like to see is a de-scaling of scale. Following the so-called “Marwood” mega merger, many industry observers predicted a ripple effect of consolidation and we’ve seen just that. The latest example took place just a few weeks ago when Choice Hotels acquired the WoodSpring Suites brand. But it hasn’t been just on the brand side.

I understand that gaining scale makes economic sense and there are plenty of efficiencies to be gained. It seems it’s better to be an acquirer or to be acquired than in between. As one management company executive recently said to me, “you don’t want to get stuck in the middle.” That being said, to me it’s a less interesting industry if it’s ruled by a handful of firms. There needs to be a way for the entrepreneurial companies to compete and bring their own unique approach to hospitality and grow organically.

Another resolution we need to have as an industry is to work collectively toward increasing inbound tourism. For years now, the expected influx of tourists, particularly from China, has been heavily relied upon to boost demand throughout the industry. But the floodgates have yet to open, partially due to the political climate. But as an industry we have to continue to fight to get the word out throughout the globe that the U.S. is a desirable place to visit and it’s not going to happen by itself.

Last and certainly not least, let’s continue to up our efforts at the hotel level to be ready for any type of terrorist activity, such as the horrific shooting that took place at Mandalay Bay in Las Vegas this past year. Granted it’s virtually impossible to be totally prepared for such an incident, but as the events of that evening unfolded it was clear that the hotel management was anything but vigilant. The unfortunate reality is that in 2018 we know something is going to happen, we just don’t know when or where. Let’s be prepared.

When it’s all said and done, the year will be judged more by RevPAR growth and other economic factors than anything else, but from my perspective the aforementioned issues are no less important for the long-term health of the industry.

Dennis Nessler    Dennis Nessler
Hotel Interactive®, Inc.
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