The importance of talent and technology within hospitality were the primary focal points of a panel discussion among brand leaders at the New York University International Hospitality Industry Investment Conference earlier this month.
During “The Leaders Check In – Part Two,” the group also weighed in on the evolution of disruptors, as well as the potential growth opportunities presented by global tourism.
Ken Greene, President, Americas, Radisson Hotel Group, acknowledged that “labor is a huge issue for this industry.”
He elaborated, “It’s not just attracting talent, it’s retaining talent…My experience is it’s not always about money, it really is not. Everyone wants to try to make as much money as they can, but you [need to] have a culture that recognizes performance. Recognition is a very important thing for retaining your folks and if you can do that they’re actually your best recruiters.”
James Allen, Chairman, Hard Rock International, CEO, Officer, Seminole Gaming, shared his company’s approach. “I think there are different levels to the conversation. Most of the focus is always on senior executives; our philosophy is a little bit different. Senior executives maybe start at 7:00 a.m. and work to 7:00 at night, our business is 24 hours. Who’s running the store most of the time? You look at people making 35,000 to 60,000 dollars a year responsible for a 5 to 10 billion dollar business. So my philosophy is focus on middle management, supervisors, directors and below and that’s usually the people that are influencing the line staff… So it’s important to hire senior executives with talent, but middle management to me is the most important,” he asserted.
Stephanie Linnartz, global chief commercial officer, Marriott International, emphasized the importance of the entire team: “Marriott has 750,000 employees globally and 96 percent of them work in a hotel. That’s what’s most important, they’re running our hotels day in and day out. That being said increasingly in a technological age the talent that we have in our corporate headquarters and our regional offices is really important, not just c-suite executives but all the way down. We’re competing with the Google’s and Amazon’s for marketing talent, data scientists, and IT people. Candidly we can’t pay as much as some of these digital superpowers, but we want the same talent,” she noted.
Linnartz went on to offer some of her observations from speaking engagements at various institutions with regards to the next generation of employees.
“When I speak to these students they talk about travel and the experience. It’s amazing how many want to come work in the travel space and experience space, broadly speaking, and they’re actually really excited and interested about our industry. Often I think we can do better job of employment marketing and talking about how wonderful our industry is,” she added.
Meanwhile, the industry continues to manage the challenge of investing in the latest technological advances, such as artificial intelligence, for example, while maintaining the personal touch.
“People and technology are not mutually exclusive things. The technology actually increases our revenue and decreases our expenses, if it doesn’t we have no business doing it. And if we can increase revenue and decrease expenses then that allows us to invest more in our people and enables them to create better guest experiences,” said Greene.
Linnartz added, “Technology doesn’t matter if it doesn’t work, right? It’s high-tech and high-touch. If the human being can’t take care of you then all that technology doesn’t matter. It’s hard to execute flawlessly all over the world simultaneously but we have to do it and we need to improve in some instances.”
Online travel companies are another critical element of technology that’s evolving and a number of hotel companies have begun to forge partnerships with such entities.
Linnartz referenced Marriott’s recent joint venture with Chinese e-commerce platform Alibaba Group Holding, Ltd. She noted that Marriott hopes the “online/offline partnership” will increase its ability to capture outbound Chinese travelers, which are expected to number roughly 100 million this year alone.
“It’s an interesting partnership. We’re learning a lot about working with a digital superpower in this way. I think you need to play a little bit in this space and see how you can work with somebody that has capabilities we won’t have, but at the same time protect the relationship with the customer,” she said, further adding that the company owns the data.
Greg Mount, President and CEO, RLH Corporation, commented on the OTAs while referencing the unique deal between Expedia and Red Lion, which allows Expedia users to sign up for Red Lion’s loyalty program and access members only rates.
“The OTAs are getting to a place where they understand that they’re going to have to create more partnerships…We looked at it as we have 28 percent of the business coming in through the OTAs, how can we better monetize that experience for our owners? It’s worked out brilliantly for us,” said Mount, who added the company will be announcing two similar deals in the future.
Mount also commented, “I think they’re also looking at extending what they provide. I wouldn’t be surprised to see the OTAs try to provide property management systems, as an example.”
The panelists were asked to look ahead and identify what some of the top issues would be.
“By 2030 the world population will be 8.5 billion people and 2 billion people will take trips. So much of them will come from Africa, Asia and the Middle East, I think the demographics of the world are going to change significantly. That’s going to have all sorts of implications for our business. Five years from now we’re going to be talking about a whole different world in terms of what the consumer base looks like,” noted Linnertz.
Greene, meanwhile, referenced a recent study on millennials. “The biggest usage of brick and mortar travel agencies for the last couple of years was from millennials. They actually did the research online and they know exactly what they want. They want the best experience possible and they want to make sure there’s somebody coordinating that for them,” he said.
Mount offered this prediction. “Is there a way to redefine franchising and get away from some of the things that we held very near and dear to us for many years and look at it through a different lens? I think we’ll start to see the potential of it becoming a more transaction oriented business and less of a typical franchise business,” he concluded.