Brand CEOs at AAHOA: ROI to owners always top of mind
 
Brand CEOs at AAHOA: ROI to owners always top of mind
13 APRIL 2017 9:15 AM

Eleven hotel company CEOs addressed attendees of the Asian American Hotel Owners Association on trends in technology, distribution, ROI and more.

SAN ANTONIO—In what was described by AAHOA President and CEO Chip Rogers as an “unprecedented” gathering, 11 CEOs of hotel brand companies converged on the same stage for the opening general session of the Asian American Hotel Owners Association annual convention.

“There is no greater symbol of the influence of our members … than what you see here today,” Rogers said, indicating the panel, which included representation from InterContinental Hotels Group, Best Western Hotels & Resorts, Choice Hotels International, Wyndham Hotel Group and more.

Hotel brands and franchise issues are of particular importance to AAHOA’s more than 16,000 members, and the panelists addressed topics that ranged from technology to balancing cost and ROI for owners when it comes to brand standards.

Brands get better at balance
Brand leaders pointed out to the audience of more than 4,000 people that the role owners’ associations such as AAHOA and their own brand associations play has resulted in brands that are much more attuned to owners’ issues than ever before.

“Working with our franchise advisory members is what keeps us in line,” said Geoff Ballotti, president and CEO of Wyndham Hotel Group.

“We don’t make decisions around investment that don’t include ROI,” said Choice Hotels International President and CEO Steve Joyce. “Do a certain number of millennials want to check in with their phone? Sure. We’ve developed that; RFID locks, too. But sometimes the expense is ridiculous and not called for by the customer yet. So we try to time what’s required to what customer needs actually are.”

Andrew Alexander, president and CEO of Red Roof Inn, said the company works with its owners to “gain insight on what mandates actually make money.” It also owns a significant number of its properties. “When we roll something out, we roll it out first across our (owned) 15,000 rooms, and we wouldn’t roll out something that wouldn’t be successful across all 50,000 rooms (in the company’s portfolio).”

Jim Amorosia, CEO of G6 Hospitality, said there’s no reason why a brand can’t expect both—to please the owner and the customer.

“You can do both,” he said. “There’s nothing wrong with growth; growth increases demand. As you do that, there’s rollover to existing inventory and they get the benefit of demand,” he said. “It’s the obligation of a (hotel) chain to have that structure where everyone can benefit.”

What to look for in a brand
The brand speakers on the panel said they stress the role brands play as partners to owners, and they offered some advice to potential owners new to their brands.

Eric Danziger, CEO of Trump Hotels, confirmed that the company is working on “a three-star, midscale franchise brand” that’s separate from the lifestyle brand Scion, which the company launched last year.

“An owner should have a role and a voice,” he said. “Your AAHOA influence has helped all the companies listen more and react.”

Elie Maalouf, IHG’s CEO of The Americas, said the process of choosing a brand should be organic for owners. “Identify the space you want to be in,” he advised.

Joyce advised looking at track record. “A franchise relationship is a long-term relationship,” he said. “You want to make sure who you’re doing business with and how they’ve done business long-term. It’s a lot like a marriage.”

Greg Mount, president and CEO of Red Lion Hotels Corporation, said owners should look for brands that are nimble.

“We’re not about jamming a huge list of standards down (owners’) throats; we look at the things important to a guest stay,” he said. “As (the industry) moves forward, it’s not going to be about these big, bulky legacy programs. It’s about making sure you’re not commoditized. It’s about the value of your real estate and the brand creating value for you.”

Tom Magnuson, co-founder and CEO of Magnuson Hotels, said it’s important to remember that a brand may not be the No. 1 reason why a guest chooses a hotel, so the brand should focus on what it does best.

“Our only responsibility is the well-being of our owners,” he said. “Our brand is not responsible for most of the major consumer decisions—those are based on location, price and uniqueness. So we focus on being a support system for each owner.”

Booking direct
Moderator Rogers pointed out that brands have been pushing reservations via brand.com sites for a while, and that return is becoming evident.

“We’re all in the mobile-first generation of how we run our lives,” said Keith Cline, president and CEO of La Quinta Inns & Suites. “It’s our responsibility as brands to educate guests as they come in. ... we have to curate an experience that brings them back.”

Joyce reminded owners to encourage their employees to put in the extra work of getting direct bookings. “Sometimes it’s easier to find a customer on an (online travel agency) than to do the work of brand.com,” he said. “We try to keep the OTAs out of your shop as much as possible, but you have to look in your own shop as well.”

Alexander said pushing brand.com bookings are as much about creating brand equity as they are about keeping costs efficient. He said Red Roof considers its website “your second front door.”

“Brand.com is where our guest and your guest will learn about the brand, become immersed in it and become a much more loyal customer.”

Keep current
The panel speakers said embracing technology changes is a key move for owners who want to succeed, and they don’t need to sacrifice other elements of hospitality to do so.

“You can think about technology differently if you design it through the point of view of a central tenet, and ours is care—having care for people,” said Mark Hoplamazian, president and CEO of Hyatt Hotels Corporation. “You can design technology through the lens of guest relations, and if you stay focused on that, there’s no trade-off. It’s more of an accelerator of how you can engage to elevate the human element.”

He cited an example of a previous Hyatt check-in procedure that required more than 30 keystrokes on a computer terminal, cutting down the time check-in agents had to spend with guests. By using technology to streamline that process, he said, employees can interact with guests better, and guests feel the benefit of quicker, improved technology.

Integrating younger employees as strong voices for a company also plays a role in keeping brands current, said David Kong, president and CEO of Best Western.

“Consider that most of the important decisions made in our companies are probably made by people older than 50,” he said. “We have to think about a whole new generation that does things the way us boomers wouldn’t dream of doing.”

“It’s important that every organization considers its future,” he said.

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