Hoteliers say disruption should spur improvements
Hoteliers say disruption should spur improvements
24 APRIL 2019 7:50 AM

Speaking at the Young Hoteliers Summit 2019 in March, sources said the industry needs to harness disruptors like Airbnb and labor shortages to fuel innovation in the hotel industry.

Editor’s note: This story was written based on a recording of the panel.

LAUSANNE, Switzerland—There are several major headwinds the global hotel industry currently faces, not the least of which are alternative-accommodations platforms like Airbnb and widespread labor shortages. But hoteliers speaking at the recent Young Hoteliers Summit 2019 believe those headwinds can be the impetus for positive change within the industry.

Speaking during the “Global brand expansion: adaptation and development” session at the event, panelists agreed that Airbnb should be viewed as a positive for the hotel industry, provided that it competes from a level playing field.

“Any competition that spurs innovation is good for any industry,” said Kenneth Hatton, SVP of global development for Belmond. “So I think it’s just great that it makes people better.”

He believes it’s important to remember platforms like Airbnb can exist and thrive without wiping out existing hotel brands.

“I never get too panicked about it because, if you remember, why does Sheraton or Hilton exist in the first place? It’s because people were traveling around, the road warriors were traveling around, and they wanted to know … that something was going to do what it says on the tin,” he said. “So the need for a standardized product came up.”

Many have decried the “shadow supply” that comes from Airbnb and how it erodes pricing power during compression nights, but Patrik Hug, senior consultant of advisory and valuation services for Christie & Co., said there is value in that added capacity.

“It’s just not possible (to satisfy all demand) with a standard hotel product on the one hand,” he said.

But he noted, as many do, that it’s increasingly important that “the playing field has to become more even” for hotels and Airbnb supply, especially as investment in the Airbnb space becomes more sophisticated.

Philipp Henle, head of global development for The Dorchester Collection, said that needs to come in the form of paying the same taxes and following the same regulations.

But in the end, having Airbnb has a competitor should result in hotel companies elevating the experience they offer.

Airbnb “is a different experience, and if (hosts) make it right, we’ve got to be better,” he said. “So everybody profits.”

Labor challenges
Panelists agreed that the scarcity of quality labor is an issue the hotel industry has to tackle head on. Dimitris Manikis, president and managing director for Europe, the Middle East, Eurasia and Africa at Wyndham Hotels & Resorts, noted not everyone is cut out to work in the hotel industry.

“Our industry is an industry that needs to find people who love people,” he said. “If you don’t love people, you’ve got no place here. That’s all we do. We wake up in the morning and we care about our people and we care about our guests.”

The idea of taking care of people needs to extend to employees, as Hatton noted retention is an increasing focus in a tight labor environment.

Human resources “is a big challenge for the industry in creating true employee loyalty to the company they’re working for,” he said. “You see it where, particularly in China, there is movement where someone will move down the street just for a few more dollars per week. That’s a massive challenge when there’s so much training going on to keep people in-house.”

As the industry grows, so too will the competition for “true talent,” Hatton said, and that will require the industry to further diversify, which in the end will be a good thing.

“I think diversity is a major issue in this industry, and you look at the number of candidates who are coming through the hotel schools, and the number of women who are represented at the top level in the hotel industry, I think it’s a real problem,” he said. “And I think this industry has a great degree of an old boys’ network … that needs to be shaken up.”

Hug noted part of the solution will be changing what hospitality jobs look like so they’re more attractive to a larger pool of people.

“I mean, everyone says there’s a shortage of labor,” he said. “But there’s a lot of labor that is untapped also.”

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