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Sorenson: Hoteliers must fight misperceptions
March 22 2013

The public still views travel as frivolous, Marriott International’s Arne Sorenson said during a keynote address at the Hunter Hotel Conference.

Highlights
  • Hotels could see a drop-off in demand if the public continues to view the travel industry as frivolous, Marriott’s Arne Sorenson said.
  • “Be absolutely unapologetic of the value that happens in the hotel business,” Sorenson said.
  • Marriott could incur between $120 million and $200 million in expenses because of the Affordable Care Act, Sorenson said.
By Shawn A. Turner
Finance Editor
Shawn@HotelNewsNow.com

ATLANTA—Hoteliers need to fight the perception the hotel industry is frivolous or else face the consequences, Arne Sorenson, president and CEO of Marriott International, said during a keynote address Thursday at the 25th annual Hunter Hotel Conference.

The industry is likely to face a drop-off in demand if that view persists because people will view travel as “something discretionary, something that can be cut,” he said. If the hotel sector is not held in high regard, potential customers will be more apt to slice their respective travel budgets.

Travel, however, is not frivolous, Sorenson said. For one thing, the hotel business is a job-creation machine. “The hospitality industry has been helping the economy grow,” he said.

Furthermore, honeymooners, people attending family reunions—they all build irreplaceable memories in hotels. “You can understand the depth of experience leisure travelers have in our hotels,” he said.

He implored hoteliers: “Be absolutely unapologetic of the value that happens in the hotel business.”

One step hoteliers can take in shifting perception is to take care of their employees, Sorenson said. There is a thinking in the industry that hotel jobs “are not good enough and not respected,” he said.

“We need to do what we can do to make sure that perception is changed definitively and forever,” Sorenson said.

It is the responsibility of hoteliers to provide their employees fair compensation and good working conditions, he said.

Sorenson estimated there are 3 million hotel workers in the United States. “The best possible thing we can do is make these 3 million people ambassadors of our business,” he said.

Referencing a refrain of Bill Marriott, executive chairman and chairman of the board at Marriott, Sorenson said: “If you take care of your associates, the associates will take care of the guest and the guest will come back again and again.”

Government squabbling
During his keynote, Sorenson also took time to give his take on the various federal issues impacting the hotel industry.

The U.S. sequester is likely to remain in place all year, he said. Democrats and Republicans are just talking past each other at this point.

“It is crystal clear the sequester will impact our business because there is a view that travel is not important,” he said.

Regarding health care, Sorenson said Marriott could be facing between $120 million and $200 million in additional expenses because of the Affordable Care Act. “It could be worse,” Sorenson said, noting that the $120 million to $200 million range was just an estimate put together by Marriott.

Global travel
Sorenson said 65 million global visitors came to the U.S. a year ago. He said President Obama would like to see that number reach 100 million by 2021.

That goal is attainable and could have a significant effect on hotel performance as many of the 35 million additional people needed to reach the 100-million-visitor goal will need hotel rooms, he said.

He said that number of visitors could lift occupancy by four or five points for the industry. “It is massive” and could be transformational for the industry, he said.

He also called for the end of visas being needed by Chinese visitors to come to the U.S. “We will immediately see more Chinese visitors” if that requirement goes away, he said.

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