Editors recap the second day of the Americas Lodging Investment Summit with takeaways, quotables and more highlights from the event.
LOS ANGELES—With the backdrop of STR lowering its 2020 revenue-per-available-room growth forecast to 0%, the second day of the Americas Lodging Investment Summit was highlighted by hoteliers figuring out how to make the best of a mediocre situation. (STR is Hotel News Now’s parent company.)
While hoteliers lamented the lack of revenue growth, amid continued cost pressures and a challenging labor market, they seemed adamant about the long-term growth prospects for the industry at-large and their individual businesses.
Day Two recap video
Photo of the day
Quotes of the day
“The joke around the office was, if we had it to do over again, we wouldn’t have created Starwood Preferred Guest.”
--Tyler Morse, CEO and managing partner of MCR, on the “Boardroom Outlook: Innovation & Distribution” general session panel, referring to the high costs involved with creating hotel industry loyalty programs. He was part of the Starwood Hotels & Resorts Worldwide team that created the SPG program.
“I don’t mean to sound flippant, but when you look at publicly traded REIT hotel stocks and how they’ve performed in the last couple years, and brand stocks and how they’ve performed, it’s gapping out very wide. We as owners have to be extremely thoughtful about how we are working with the brands. … It’s incumbent on us … that we’re looking out and creating the highest and best returns for the real estate, and I don’t always think it’s a brand.”
--Jay Shah, CEO of Hersha Hospitality Trust, on the “Boardroom Outlook: Branding Evolution” panel.
“We’re going to talk ourselves into a recession, and maybe that’s not a bad thing because we need a little course adjusting in construction costs.”
--Chip Ohlsson, EVP and CDO, Wyndham Hotels & Resorts, discussing what concerns him about the hotel industry.
Tweet of the day
Former White House @PressSec and EVP at @McDonaldsCorp, @Robt_Gibbs, commends the hospitality industry for leading key workforce issues, including 5-Star Promise. #ALISconference #DreamsHappenHere pic.twitter.com/yhPzXc7wOB— AHLA (@AHLA) January 28, 2020
Slide of the day
STR President Amanda Hite shared the latest revised forecast from STR and Tourism Economics at the ALIS conference Tuesday. The numbers reflect “a slight downgrade on the RevPAR side,” Hite said.
Data point of the day
1 out of 25: The ratio of jobs in the U.S. that are connected to the hotel industry, according to Oxford Economics, shared by Debra Cannon, director of the Cecil B. Day School of Hospitality at Georgia State University.
It’s very clear the U.S. hotel industry is on the brink of a cycle shift, because all gloves are off. Speakers who took the general session stage Tuesday at ALIS weren’t shy about sharing opinions—sometimes harsh—on everything from the value (or lack thereof) of brands, to the ever-present high costs of labor.
STR and Tourism Economics released a revised 2020 forecast, which projects RevPAR growth in 2020 to be zero—the first non-growth year since 2009. Lack of pricing power continues to drive that nonexistent-to-weak RevPAR number, but judging by a lot of what speakers were saying, I’m not entirely sure they care. Non-rooms revenue and its associated profitability is instead taking over many conversations. On this topic, every hotelier has an opinion on what will move the needle. Food-and-beverage revenue is high on the list, but I also heard a lot about increasing automation to maximize efficiencies around the hotel.
Finally, I think the conversation we’ve been having for years now about labor shortages has struck at the heart of most hoteliers, who seem to be putting their money where their mouths are in investing in corporate culture and taking care of employees. As the cycle shifts, we’ll see more clearly the longer-term impact corporate culture has on retention and ultimate company survival.
Also mentioned in most conversations: coronavirus. People are scared about this one, more so than I saw around Zika virus. Perhaps related? Fewer people are shaking hands or going in for that hug this year. (And that’s for everyone, not just me!)
--Stephanie Ricca, editorial director
The hotel industry is antsy right now. It’s been a long cycle, and that coupled with the knowledge that all cycles eventually end has led to a certain, unique anxiety among hotel owners and operators. Even so, there remains a sense that hoteliers can accomplish much in an environment of lackluster-to-no growth.
I heard various hotel executives say that, while the macroeconomic environment and the overall attitude toward the hotel industry isn’t great right now, the solution isn’t rooting for a downturn to hit the reset button, but instead finding new and creative ways to spur growth and tell your own story as a hotel company.
We can only hope for a slow landing to the cycle, along with a continued commitment by hoteliers to hone their businesses as they would in a sharper downturn.
--Sean McCracken, news editor
One of the reasons the U.S. hotel industry is doing as well as it is right now is because demand for hotels is so high. Americans want to travel domestically and internationally, and many foreign travelers want to visit the U.S. This high-demand environment, however, comes with a couple of concerns.
The first has a deadline: Real ID, a requirement from a 2005 act of Congress that set new standards for state-issued driver’s licenses and identification cards to allow U.S. citizens to travel by plane. The deadline is 1 October 2020, and a significant number of Americans are unaware of this new requirement.
As Roger Dow, president and CEO of the U.S. Travel Association put it, unless hoteliers and others in the travel industry help get the word out, they can expect starting 1 October that 5% to 10% of both guests and meeting attendees won’t show up for their reservations.
The weaponization of travel is another point of concern for hoteliers, as it turns travelers away from visiting certain destinations, mainly for political reasons. Some states have discouraged their residents, and companies and industries have discouraged or stopped their employees from traveling to other states because of political and social issues. The problem with this tactic, hoteliers said during today’s general session on travel, is that these efforts really don’t affect the people behind the issue and end up hurting regular people instead through loss of business. There’s a real concern that China could, at any point, tell its citizens not to travel to the U.S., as the Chinese government did with South Korea.
Panelists also said hoteliers must do more to get the message out to international travelers that despite whatever is happening in the U.S. politically, the American people welcome visitors from all over. There has been a lot of political vitriol that I can’t imagine makes the U.S. seem a welcoming place for everyone, so that’s likely going to be a tough (but worthy) effort for hoteliers to undertake.
--Bryan Wroten, senior reporter