Out Of Service?
Hotel Execs Express Concern About Guest Satisfaction During BITAC Panel
With hoteliers operating in what is now commonly known as the ‘new normal’ following COVID, there have been a number of changes to the overall experience which have left some hotel executives concerned about the long-term impact on the guest and the industry as a whole.
A few high-level executives voiced their concern during a recent BITAC Symposium panel entitled “State Of The Industry: Hotel Leaders Assess Current Lodging Landscape.” The panelists also weighed in on rate gains within the industry, the impact of COVID as it relates to international travel and their outlook for the next few years.
Joe Bojanowski, president, PM Hotel Group, pointed out that “demand has not fully recovered yet” despite widespread ADR increases.
“The guest satisfaction scores that have declined significantly over the last couple of years I think is a bit of a threat to us. It potentially exposes us to commoditization of our product and then the decline from a value perspective and the inability to grow ADR from there,” he said.
Mike Marshall, president/CEO, TPG Hotels & Resorts, agreed that with the exception of the luxury market good service is becoming harder and harder to find.
“Where we’re missing is the mid-market; we’re just not performing well as hoteliers and it’s upsetting,” he said.
Marshall offered a simple explanation for the shortfall in service. “We don’t have the employees,” he said, adding, “when you have a government that produces so much money that it’s easier to stay home and not work it’s counterproductive to the entire system.”
Mary Drummond, CMO, Worthix, provided the guests’ point of view on some of the changes to service levels.
“What are the guests thinking and what are they feeling? How are these unprecedented times affecting them and the value that they perceive in what hotels are delivering. With every single change comes a shift in customers’ perception of value,” she said.
While COVID has become less of a focal point for the overall population in recent months, it remains a factor within the industry, according to Prem Devadas, president, Salamander Hotels & Resorts.
“From an employee standpoint and a staffing standpoint it’s an issue and continues to be. You could wake up one morning and six people from one department aren’t there because somebody just tested positive,” he said.
Devadas further noted that two of the company’s resorts in the Caribbean were the last “to normalize” with regards to guest protocols and that the properties have since seen a “significant pop in business.” However, he added, “with that said, who knows what’s going to happen?”
Buggsi Patel, president/CEO, BHG Hotels, was more concerned about international travel with regards to COVID as opposed to just the U.S.
“What’s happening in the rest of the globe? Are they allowing people to travel? You’ve got China, Hong Kong, Japan and all these other places that really are in semi lock-down and that’s going to be a big deal for inbound traffic. Those travelers are the travelers who stay here 5-6 nights and spend thousands of dollars. So let’s hope that kind of loosens things up and brings them back,” he said.
Marshall, for his part, emphasized one positive trend that has been the result of the reduction in international travel throughout the globe.
“I think one of the great things is that so many Americans and so many people that live in this country that are living longer and longer finally decided ‘hey, let’s see our own country. We don’t need to go to Europe.’ That’s what’s driven a lot of the leisure business in our industry and I think it’s going to continue,” he said.
Patel also sees some light at the end of the tunnel when it comes to corporate travel.
“I think group is going to be way stronger next year than this year,” he said.
Whether it’s been leisure or corporate driven, the industry has seen average daily rates (ADR) hold up remarkably well despite the downturn of the last several years.
“I think in this industry we learned a great lesson. When rates collapsed post 9/11, it took us years to get back. In 2009 it literally took five years to get rate back. We did not lower rates, AHLA did a great job with federal per diems. The brands and everyone else we’re highly disciplined in not discounting corporate rates so when that demand is coming back and has come back it’s allowed for the ADR’s to be maintained,” said Bojanowski.
“We’re seeing some crazy rates in some [very small] towns that we would have never thought about so that’s a good thing, but it also brings expectations. I think there’s an opportunity to keep the rate up,” added Patel.
There is plenty of opportunity in this current cycle as well, despite some of the economic headwinds.
For example, Devadas noted the company is in “growth mode” and looking to acquire.
“We look forward sometimes to these downturns being an opportunity to find value in buying something and there hasn’t been [much value] in the luxury segment,” he said.
Bojanowski pointed to the resiliency of the industry as he expressed “big encouragement” for the future.
“What do people love to do when they have lots of money and the economy is going really well? They want to travel. What do people want to do when their life is a struggle and things are bad? They just want to get away. It’s a good industry and I think we’re poised for pretty good years ahead. There are some challenges and some headwinds, but still some pretty good cycle ahead of us for at least five-plus years,” he said.
