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Varying Viewpoints On A Recovery

By Dennis Nessler | January 22, 2021

A handful of leading lodging executives expressed a mix of tempered optimism and concern when assessing the prospects for an industry bounce back this year.

The brand and owner/operator executives commented on how they see the current market shaking out during an HVS & Lodging Conference 2021 webinar entitled “A View From The Top” Hospitality Insights & Strategies.

Geoff Ballotti, president & CEO, Wyndham Hotels & Resorts, came in on the optimistic side of the ledger.

“The longest running upcycle has just ended and so many in our industry are predicting really a record comeback in terms of leisure transient in the second half of this year. I think we’re already seeing that. December was better than November despite rising [COVID] caseloads and to see economy occupancy already ahead of last year [last week] is something that certainly excites me. I do think travel is going to be coming back,” he said.

Heather McCrory, CEO, North and Central America, Accor Hotels, reinforced the point with one caveat.

“I’m actually very bullish about 2021 and very hopeful that it’s going to come in the way that everyone’s predicting it will. What scares me is that it doesn’t. We’ve gone through a tough year in 2020. My biggest worry is that it just won’t happen as quickly as we need it to, but I actually do believe we’re in the right place to move that forward,” he said.

Dave Johnson, executive chairman, Aimbridge Hospitality, noted that while he’s often optimistic by nature he has a more cautious immediate outlook.

“We all took it on the chin in 2020. I’m a little more bearish on 2021 than I think many of my colleagues are. I don’t think healthy people are going to get the vaccine until probably late summer or early fall and I, for one, believe there’s going to be kind of a waiting quiet time. I’m saying 2021 is going to be a little bit more of transition year, but it obviously depends on what asset class you’re in within hospitality,” he said, later adding he does remain “probably one of the most bullish on 2022 on beyond.”

Justin Knight, CEO, Apple Hospitality REIT, Inc., described his outlook as being “somewhere in between” as he cited growing competitive concerns.

“There are more options I think this year to choose from than there are in ordinary years. Coming into this year I really felt that the virus would be the only thing to worry about and I think that the beginning of this year has proven that there might be a few other things to keep our eyes on. I think there’s no doubt there’s a tremendous amount of pent-up demand, both on the leisure and on the business side. There will be stages of this recovery and really I think how you feel the recovery will depend a lot on where you are,” he stated.

Biran Patel, AAHOA Chairman, 2020-2021, meanwhile, is focused on a few challenges.

“One of the biggest concerns that I have for hotel owners is the ADR [average daily rate]. We’ve taken a hit all the way to maybe about 15 years back with ADRs. Another thing that worries me is the return of corporate travelers. Hopefully, the trend of online meetings is not somewhat permanent. The vaccine gives us some optimism, but how is that going to be distributed and if the distribution is delayed then can that impede the economic recovery?” he said.

The participants went on to discuss exactly how they have modified operations to adapt to the new normal and a far more challenging economic environment.

According to Knight, “I think in the pandemic we’ve started from scratch, as have a lot of other ownership and management groups, looking at every aspect of our business. Looking at how we can perform various tasks at the hotel level and really questioning what are the things that we offer that have the greatest value to our guests? The result in the short term has been a significant modification in the way we run our business.

“Some of that is dictated by the environment we’re in, but there have been learnings in that process that I think will help us as we move forward, and begin to gain back occupancy and rate, to operate better and more efficiently provide the services and amenities that our guests most value. I think that bodes well for the future of our industry from a profitability standpoint and in terms of attractiveness to our guests,” he said.

The brand executives detailed similar efforts they have initiated to help franchisees.

“We put it through the filter of people, process and product and how is that going to be impacted and made sure we didn’t cut too close to the bone. We wanted to make sure that we deliver on the service component as well. It was an interesting process. We thought we were doing a great job, we thought we had done everything we could do in that run up 10 years to it, but we’ve found that we can do things differently and get the same result and sometimes better results. So we’ve been definitely digging into our DNA to make sure that we’re doing everything we possibly can to deliver that margin to the owner and frankly these days just getting through this period of time without compromising the guest experience,” said McCrory.

Dennis Nessler

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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