Panelists on “The future of full-service hotels” panel at the 2016 Hotel Data Conference said the full-service world is changing, but it’s still performing well.
NASHVILLE, Tennessee—The full-service segment of the hotel industry is changing with the times, but sources believe it’s still doing well.
Participants on “The future of full-service hotels” panel at the 2016 Hotel Data Conference in Nashville last week said hoteliers should be updating their full-service operations based on what today’s guests want.
“If you truly have a full-service experience … you can make people’s lives easier,” said Bill DeForrest, president and CEO of Spire Hospitality. “You can certainly make their travel experience easier if you give them a great place to work out, a great place to (eat) during the day … What’s the experience they’re looking for? What is the value of the experience that will help make their trip easier?”
Cartarwa Jones, VP at RLJ Lodging Trust said guests are still looking for an excellent dining experience.
“I still believe that people want the upscale food-and-beverage experience,” she said. “The restaurant and the bar service, and some brands do that better than others. (Kimpton Hotels & Restaurants), for example, does a great F&B operation, and I still think that some guests do want that as well as the service level. So the higher you are on the chain scale, luxury or upper upscale, there is some expectation that you need services, and I think guests still want that.”
A change in what the guest wants
Full-service guests still expect great service, but the types of services guests want are changing with the way in which people live, DeForrest said.
“If you think about how people live today, with grab-and-go markets, coffee bars ... I think you can repurpose what a full-service hotel does,” he said, noting Spire Hospitality has tweaked its approach at some older full-service properties. “You can actually enhance it in a way significantly (based on) what people are looking for.… They really do want services that allow them to live the life that they normally live when they’re home.”
Lily Mockerman, president and CEO of Total Customized Revenue Management agreed that full-service properties aren’t quite what they used to be.
“It’s not so much that full service is dead, but maybe the way we’ve always done it is no longer viable,” she said.
Jones said hoteliers need to adapt in the next several years to perform well in the full-service segment.
“I think (hoteliers) have to adapt to the changing times,” she said. “They need to be able to control the cost. You’re offering more amenities, you’re offering more service levels, and I think one way to (cut costs) is maybe through technology if you can find a way to operate more efficiently using technology to offset some of those cost structures. So I think, as a full-service operator, you have to find ways to cut costs and operate more efficiently.”
She said operators might be able to start by cutting costs at the concierge level.
“You may go to a virtual concierge instead of a full-staffed concierge,” she said.
The move to more advanced technology in hotels could also help full-service owners and operators repurpose staff to more experiential roles rather than standard roles such as the front check-in desk, according to Tim Benolken, SVP of hotel operations in Western North America at Hilton Worldwide Holdings.
“Guests are going to continue to see technology,” he said. “You’re going to see digital check-in; you’re going to see digital key straight to the room. All that stuff is happening, but that just gives the owner or the operator the option to repurpose (labor).”
Threats to full service
Panelists said they saw technology, labor costs, the state of the cycle and guests’ desire for memorable experiences as possible threats to the full-service industry in the future.
“I think (the biggest threat) is probably labor costs,” Jones said. “Full-service hotels are more labor-intensive than limited-service.”
Mockerman said “technology and agility go hand-in-hand,” which could be an obstacle for some full-service hotels because they might have systems, such as property management systems, that are hard to adapt with advances in technology.
Benolken said hoteliers need to have plans in place to deal with a softening market as the next downturn approaches because “a downturn, historically, puts more pressure on full-service operations.”
Full-service hotels also could be in trouble if they’re unable to provide the experiences they promise to guests, DeForrest said.
“I think the biggest threat that we have is the experience awareness,” he said.
He even compared it to the power of pricing.
“Experience transparency is a bigger threat than pricing transparency,” he said. “You will not be able to deal with all of the other things because you are not able to drive top-line revenue because people’s minds are made up before they ever walk in.”