On Day Two of the NYU hospitality conference, hotel executives discussed the potential for the economic cycle to shift, and some seemed more ready for it than others.
NEW YORK—Telling the same story for 10 years, even when it’s a good one, can get old, as some hoteliers seemed to suggest the onset of boredom with the decade-long economic up-cycle and continued—but slower—growth.
Accor Deputy Chief Executive Officer Chris Cahill reiterated the stance of Accor CEO Sébastien Bazin, who shared on Day One of the conference that a shakeup, from time to time, can be good for business.
“Sébastien said it pretty well: Europe’s in chaos, that’s what we like,” Cahill said. “When you add up all of the (geopolitical) issues, it can be frightening, but it doesn’t seem to affect travel on a macro level.”
Others, including HREC CEO Mike Cahill, talked about “cycle fatigue” and took a more welcoming stance to disruption, to a degree.
Is this a case of “be careful what you wish for”?
Day two recap video
Photos of the day
Quotes of the day
“Strategy is consistent; tactics change every day. If you’re changing strategy every year, it’s not really a strategy; it’s a slogan.”
—Elie Maalouf, CEO, Americas, InterContinental Hotels Group, speaking on a panel titled “The leaders check in – part two: Consolidation, scale, and the structure of the hospitality industry.”
“A few years ago, we would’ve been talking about interest rates, the economy, consumers, (revenue per available room). I think the majority of our discussions now are around other things, like costs. It’s all costs.”
—Michael Medzigian, chairman and managing partner of Watermark Capital Partners
“Technology is critical to our business. We could probably operate a hotel today with very little human activity, but that’s not the experience you want. You want to make your team on property more efficient so they can engage with the guest.”
—Ken Greene, president, Americas, Radisson Hotel Group, on the integration of technology and human touch.
Tweet of the day
Hoy participamos de la #NYUHospitality donde presentamos la realidad de Puerto Rico tras el paso de los huracanes Irma y María y las iniciativas de inversión y desarrollo que hemos implementado. @CCamposTURISMO @GjPortela pic.twitter.com/O2SvkR9ZI3— Ricardo Rossello (@ricardorossello) June 4, 2019
A fun fact: I didn’t hear the word “downturn” once in the last two-and-a-half days, and that’s a feat, given the news trends of the last few years. On the flip side, if I had a dollar for every time I heard the word “automation,” I would definitely be a few dollars richer. The industry has figured out this prolonged up-cycle, and the order of the day is efficiency. The hotel industry is no longer growing at breakneck speed, and that’s OK—as long as it’s growing (and as long as any given property or portfolio is growing at all), everyone’s fine.
But there’s a flip side to figuring out the prolonged up-cycle. HREC CEO Mike Cahill summed it up with the phrase “cycle fatigue.” He described it like this: The current cycle has stretched on for so long that while hoteliers know how to make it work, it’s just not that … exciting. I can see it. A stretched-out, efficient cycle is safe, and safe is good. But you can’t help but wonder what sort of shake-up may be around the corner.
—Stephanie Ricca, Editorial Director
Success in the hotel industry today isn’t the same thing as it was just a couple of years ago. The discussion at this year’s NYU conference have been markedly different than even the recent past, largely because hoteliers are ever more pinched by rising costs. They are most vocal about the increasing costs of labor, for good reason, but an overall growing cost structure has put the pinch on business around the country.
As Noble Investment Group CEO Mit Shah pointed out in the morning general session, 2.5% RevPAR growth, which is already more than hoteliers can expect in 2019, would’ve been viewed as alright in the recent past. Now it’s break-even, at best. So discussion increasingly revolves around how to do more with less, often fueled by technological innovation.
—Sean McCracken, News Editor
One indication of how the industry is changing and evolving can be found in how hotel executives describe their companies.
Many will say they aren’t just hotel companies anymore. They’re lodging companies, offering options in addition to hotel rooms that include, in the case of Marriott International now and others, homes and villas. Margaritaville Hotels & Resorts and Hard Rock International hotels aren’t just hotels; they’re entertainment and dining centers. Others are leaning into the wellness trend, becoming almost health centers in addition to hotels.
Accor wants to be everything to everyone, as evidenced by its newly rebranded loyalty program, ALL, which stands for Accor Live Limitless and seeks to bring together its lodging brands and all of its augmented hospitality offerings, adjacent to hotels, such as catering and concierge services.
Accor’s Cahill said on the “Leaders check in” panel that the company is trying to accelerate the number of touchpoints with guests, on- and off-property—from maybe a once-a-month stay in Accor’s hotels to interacting with them once a week or once a day.
This, of course, opens up a whole new world of opportunities for the industry. Hotels, it seems, were yesterday. Tomorrow, it’s all about world domination.
—Robert McCune, Managing Editor