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Major Brand CEOs Weigh In On Recovery Prospects, Workforce Issues

By Dennis Nessler | April 1, 2022

Despite a number of macroeconomic headwinds, a handful of major brand CEOs remain confident that the lodging industry is inching closer toward a full recovery within the next few years.

Speaking at last week’s Hunter Conference during a panel entitled “C-Suite Conversations,” these leaders addressed a number of issues, including labor shortages, current business travel conditions and some of the ongoing economic challenges.

George Limbert, President, Red Roof, cited inflation as his top concern. “The way you combat inflation is you raise interest rates and you encourage people not to spend. People not spending is a bit of a threat to our industry,” he said.

Meanwhile, Geoff Ballotti, President/CEO, Wyndham Hotels & Resorts, expressed concern over the lack of visitors from overseas.

“I still think international inbound has a long, long way to go. That is going to be a big piece of full business travel recovery for our industry,” he said.

When asked about whether the U.S. lodging industry as a whole has fully recovered, Ballotti referred to statistics that overall group room nights on the books are still down some 33 percent from 2019 levels.

“I mean that says it all and that’s just domestically. Then we all know what’s happening internationally in China, Southeast Asia, and Latin America. So has the industry recovered? Absolutely not,” he said.

Rob Palleschi, CEO, G6 Hospitality, offered some projections when it comes to business travel.

“I think we all agree that ‘23 is when it is, it’s just at what point in ’23? We have to get through the summer travel season. Business travel is going to be ‘ok’ during the summer and then I think in the fall it picks up, but I don’t think we really get that robust surge until you get into January or February of next year. Then I think really all bets are off and it’s going to be back,” he said.

Tom Buoy, interim CEO and EVP, CCO, Radisson Hotel Group, also believes there are better days ahead.

“When I look at the business traveler you look at organizations that are first thinking of duty of care. Do we want to put our people in harm’s way and do we want the legal accountability for doing so? I think if you move through that what’s going to change people’s behavior it’s the fear of missing out. If you’re selling a commodity in today’s environment and your competitor starts to travel and they start developing endearing, long-term, compelling relationships with your customers you’re going to start losing business. That fear of missing out is what’s going to drive people back to work and back to travel,” he said, adding just when that will happen “is very hard for us to predict.”

Palleschi further noted there are some positive signs at the property level.

“We’re feeling it from market compression and we’re starting to see it in city-center locations and suburban markets. We’re starting to feel that and so for us it’s positive,” he said.

The executives were asked during the discussion about what kind of impact the ongoing labor shortage is having on their properties.

“It’s just forcing us to continue to raise pay rates and provide increased benefits and in most cases we’re not able to transfer that cost over to the customer through an increase in rates. We are keeping at pace with the market, but it’s not exceeding what we’re paying so it’s impacting our owner’s profitability,” said Palleschi.

Ballotti underscored the importance of the issue for the industry.

“How do we attract people to our industry? People do not view this as the easiest place to work or the best place to work necessarily. It was an issue before we came into this pandemic…it’s still our biggest issue. It’s the responsibility of everyone in this room and at every conference that we make sure that we’re all thinking of ways to make sure that the young workforce out there views this as the place that we all viewed it as 15, 20, 30, 40 years ago,” he said.

Buoy, meanwhile, put an emphasis on proper training.

“Developing associates is obviously very important, but at the same time training people to be servant leaders and actually training them to coach and to coach effectively [is critical]. We need to start with today’s leaders and broaden their perspective and allow them to see the world through different lenses. Focusing on developing the younger leaders of today means you to have to wait 10 to 20 years for that change to occur. For me you have to start with our senior leadership team, senior directors and above, and really educate them on what it means to serve and lead and to coach,” he said.

Finally, Lambert, noted he believes there are solutions for these and other critical hospitality issues.

“Failure to embrace the spirit of innovation is our number one industry challenge. Innovation and technology will help us solve the workforce issue and help us solve some of supply chain issues,” he said.

 

 

Credit
Dennis Nessler
Editor-in-Chief

Dennis Nessler is Editor-in-Chief of Hotel Interactive, parent company of Hotel Community Forum. Nessler brings more than 28 years of editorial experience to his position, including some 17 years in the hospitality industry. As part of his duties, Nessler not only covers the industry editorially but moderates various high-level panel sessions at hospitality events and frequently conducts one-on-one interviews with C-level executives.


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