5 things CEOs are saying about the hotel industry
 
5 things CEOs are saying about the hotel industry
19 JUNE 2018 7:51 AM

Industry leaders from AccorHotels, Hilton and MGM Resorts International shared insights into their companies and broad trends they’re seeing across the hotel industry.

NEW YORK—When hotel leaders gathered earlier this month for the 40th annual NYU International Hospitality Industry Investment Conference, some top industry executives shared insights on what’s going on at their companies and the trends that are prevalent across the industry.

Here are some top takeaways from the “Coffee talk” media event during the conference.

1. Immigration policy hurting hotel labor pool
MGM Resorts International Chairman CEO James Murren said his company has been negatively affected by some of the immigration policies and stances of President Donald Trump’s administration.

“We feel there are multiple social issues we need to take a stand on, including (the Deferred Action for Childhood Arrivals program) as an example,” he said. “We feel very strongly about the fact we have to stand for something as a company.”

Hilton President and CEO Chris Nassetta said hiring an immigrant workforce is a vital part of his company’s mission to serve customers, and he is hopeful a long-term solution to immigration issues can be found.

“Sadly, immigration has become a political football and fundraiser,” he said. “While I’m a hopeful sort, I do believe that in our future there is room for immigration reform.”

2. Hilton working on launching multiple brands
One of the recurring themes of this year’s NYU conference was discussion about new potential brand launches from Hilton, which Nassetta confirmed three new Hilton brands are going to be announced sooner rather than later.

“We’re working on a host of transactions for all three around the globe,” he said. “And when we think it’s the right moment (to formally launch the brands), we’ll get there. I’d be very surprised if we don’t end the year having launched two of the three, and the third will be early next year.”

Some of the pending brands, he said, include a “hostel on steroids” and a luxury soft brand.

Nassetta said Hilton has spent some time rethinking its overall approach to brand launches, ultimately deciding that tying those launches to one of the handful of investment conferences held throughout the year might not be the best strategy.

“There ends up being a lot of noise around these conferences,” he said. “And we think we can create more oxygen for what we’re doing.”

3. AccorHotels will remain acquisitive
We can say with certainty that Hilton will keep launching new brands, but another thing that is a lock is that AccorHotels will keep up its streak of acquisitions.

After adding several regional hotel companies around the globe—including Mantra Group, Mövenpick Hotels & Resorts, Atton Hoteles and Mantis Group—AccorHotels Chairman and CEO Sébastien Bazin said his company is also focusing on buying companies that provide services related to hotel stays, a concept he referred to as “augmented hospitality.”

“We need multiple, frequent interactions with the same customer,” he said.

Bazin commented on reports that his company is looking into a possible acquisition of Air France KLM, confirming that dialogues have taken place, but that’s nothing new and the discussions are in very early stages.

“We’ve been engaged for the past four years in digital initiatives related to loyalty,” he said. “There are many, many similarities in our clients. … (So to) bring both together is a good thing, but we don’t need to be an investor to be a partner.”

4. Home-sharing remains a hot topic
Amid news that Marriott International is piloting a home-sharing program in London—along with investments in the space made by Hyatt Hotels Corporation and AccorHotels—Nassetta was asked if Hilton executives are considering making a similar move. Nassetta didn’t rule out possibly investing in the space at some point, but for the time being he doesn’t see it as the right fit for what Hilton likes to do.

“We’ve spent a lot of time looking at the home-sharing industry, thinking about it and talking to various places, and at this point we’re not doing anything by choice,” he said. “I’m not saying we wouldn’t do it in the future, but I’m fundamentally of the belief that it’s a different business.”

He acknowledged there is some customer crossover between hotels and home-sharing, but guests in each have different needs and expectations.

“I’m not convinced yet that we can do what we do well in that context and make money doing it,” Nassetta said.

5. MGM stresses sustainability
Sticking with the idea that his company needs to stand for something, Murren said MGM is putting an increased focus on sustainability, having built “the largest rooftop solar” system at Mandalay Bay and reducing energy usage over 30% in the past five years. He said it’s even more important as a Las Vegas-based company to take that approach.

“I live in the desert, and in the past developers have had a belligerent attitude towards the environment,” Murren said, noting there have been impressive improvements in areas like water recapture and smart landscaping.

He noted some investments in areas like sustainability don’t have a clear return on investment, but that shouldn’t discourage businesspeople from making those moves.

“You should do it anyway,” he said. “I think that also we’re starting to get greater consciousness around this topic globally and in the private sector.”

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