Will opportunities for owners elevate or landslide?
 
Will opportunities for owners elevate or landslide?
31 OCTOBER 2016 7:21 AM

Let’s consider the questions for hoteliers as the industry climbs new mountains and crosses new valleys.

The landscape of our industry has just changed dramatically. The acquisitions that we have witnessed in the last 12 months alone are notable. And, of course, the most recent and significant of consolidations could tremendously affect how hotel owners plan for their own entrepreneurial futures.

A number of international brands have exponentially increased their global footprints, and hotel owners need to consider how this affects distribution of rooms and negotiating power with franchises—and, for that matter, online travel agencies. How do we continue to push ourselves to be more innovative and create new, out-of-the-box and well-rounded partnerships? How does a small business hotel owner remain relevant in an era of shared economy and new thinking?

Brands are not the only hospitality entities in consolidation mode. As real estate investment trust structures also evolve and continue toward an asset-light direction, what opportunities might arise for potential owners? Could hotels be removed from portfolios—which may open new opportunities for owners?

On 28 September, the United States House of Representatives passed a bill that moves the effective date from 1 December to 1 June 2017 for a final rule to double the salary threshold, under which most salaried workers would be guaranteed overtime pay when they work more than 40 hours per week. Regardless of the postponement, owners of small businesses and hotels must pay close attention.

The changes to the overtime rules would raise the threshold of eligibility for overtime from $455 per week to $913 per week, or $47,476 annually. As a result, about 4.2 million more workers across the U.S. would become eligible for overtime pay. Will this mean that some of our colleagues can no longer afford to stay in business? Does it mean having to hire more employees in a part-time capacity to execute the service and delivery promise we provide to our guests?

Will the upcoming U.S. elections affect the business of hotel ownership? Will the varying approach of either administration allow for consistency of current strategy or reversal of policies?

We are only a few short weeks from the November election—and perhaps from a new political era. With the enormous changes that we’ve seen in our industry of late, we have already found ourselves in the beginnings of a very different macroeconomic cycle. Therefore, we need to remain flexible, embrace new and different thinking, and be open to different approaches.

Steve Ehrhardt is owner and operator of Ehrhardt Properties and SJS Hospitality, operating 11 hotels in Missouri and Oklahoma, and is part of a family business that includes a portfolio of 30 hotels. Steve serves as the 2016 Chair of the IHG Owners Association. Steve can be contacted at steve.ehrhardt@ihgowners.org.

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