Resilience And Recovery
Brand Execs Are Bullish On Years Ahead For Lodging Industry
A handful of veteran brand executives expressed confidence about where things are headed over the next couple of years and touted the overall resilience of the lodging industry during a recent panel discussion at the Hunter Conference.
The panel, which was entitled “Brands Tipping The Scale,” also addressed a number of ongoing issues ranging from alternative lodging models to the growing need for pet-friendly accommodations.
Jim Tierney, SVP, development & owner relations, Hyatt Hotels Corporation, provided some reasons for optimism.
“At Hyatt we’re really bullish on the recovery. We’re seeing leisure results lead the recovery, but we’re also seeing great pick up not only on business transient, but also with groups and meetings. So we’re looking forward to continued momentum and improvement in ’22 and beyond,” he said.
Chip Ohlsson, EVP and chief development officer, Wyndham Hotels & Resorts, underscored the point.
“I believe there’s no better time to be in this [industry]. We had an 11-year cycle that was unprecedented we thought, but when we look at our numbers we think that there’s a huge runway. We do believe there is going to be an ADR [average daily rate] push. We believe that people are going to travel more than they ever have because they realize what they missed over for the pandemic. So this is the opportunity for a lot of people to get involved in this industry,” he said.
Julienne Smith, SVP, development, IHG Hotels & Resorts, urged conference attendees to “continue to tell your story” as she also acknowledged the importance of getting more people involved.
“We need people to be wanting to be a part of our industry, right? For young people coming out of college, it’s not just about working in hotels there are a lot of other aspects to this business that are attractive. Attracting young people to this business I think should be a primary focus to allow us to grow and evolve,” she said.
Smith also was bullish on performance prospects.
“Just get out and travel, that would be my recommendation to everybody. Travel and post about your travel, get back into the cities. I know we see a lot of recovery into the sunbelt region of the U.S., but we are starting to see some green chutes in our major urban markets, which is important,” she added.
Noah Silverman, global development officer, U.S. & Canada, Marriott International, pointed out he is “optimistic” as he detailed the industry’s resilience.
“This industry took probably the most significant gut punch—certainly in my 25 years and probably in the history of our industry—in the last couple of years. The resilience that we’ve seen and the recovery that we’ve seen in the aftermath of that tremendous gut punch is pretty reassuring,” he said.
Meanwhile, one of the key trends that gained momentum during the pandemic was pet-friendly accommodations as more and more travelers look to bring their companions on the road with them.
“With bleisure [business and leisure] we’re see longer and longer average stays, I think people will continue to want to bring their pets on the road. I expect that trend will continue,” said Tierney.
A couple of the executives acknowledged this trend has prompted brand companies to re-examine some of their policies going forward.
“We have certain brands today that are more pet friendly than others. It’s easier for us to kind of stay in that lane with those than it is to kind of expand that more broadly across our portfolio,” said Silverman.
Smith, however, pointed out that when it comes to these types of decisions there needs to be consideration for the company’s franchise partners as well.
“It has been a brand-by-brand decision at IHG. Kimpton has a philosophy that if you can fit it through the front door then you can bring it. I think the challenge with making any kind of brand changes–whether it’s housekeeping or no housekeeping, charge for the Internet or don’t charge for the Internet–it’s not just the brands making those decisions. We’ve got a whole group of franchisees who are vested in our hotels who are needing to be advised on what changes we’re making and need to be largely on board with what we’re doing. They are our primary customer, the ownership community is pretty paramount in our decision,” she noted.
“The way that our industry is structured requires us to be very thoughtful in terms of engaging with our owners and franchisees about decisions that we make from a brand perspective,” he said.
Finally, the panelists were asked about the potential upside of alternative lodging options, such as residential complexes or home sharing venues.
“In some ways Marriott dipped their toe into that space when we launched Homes & Villas by Marriott, which was our effort to kind of start to siphon off a little bit of the top end of what might have been Airbnb. They were ideally in markets where we were having trouble distributing our traditional brands because they weren’t locations for traditional hotel products. So there might be an evolution of that space,” he said.
Ohlsson, meanwhile, referenced an example where an owner took several floors of an apartment complex and made it part of Wyndham’s Trademark Collection, which is a soft brand.
“The biggest challenge we have is to make sure—and Digital Key helps a lot with this from a technology standpoint—is there a front desk? Is there service? Do you have housekeeping, do you have all of that? But if a consumer knows that going in and they get a great condo building they’re happy,” he said.