Every year, the Hotel Business Green Book Directory & Market Guide offers insights from experts on a variety of industry subjects. This year, we are offering even more insight with Green Book Extra.
Rob Tanenbaum, principal, Madison Hotel Advisors, provides his thoughts on issues affecting hotel asset management.
Has 2021 lived up to your expectations? What’s your outlook for the year ahead?
Short-term group bookings are extremely encouraging, and the most recent Q3 operating results from both brands and ownership groups reflect exceeded expectations. It was particularly wonderful to see several large hotel conferences (Hunter, ALIS, NYU) and brand owner meetings (Marriott, Hyatt) return, and while not at historic levels, it continues to strengthen our industry.
The outlook for 2022 is one of continued growth as business travel begins to gain momentum with a return to the office, even as a hybrid style. At the same time, the importance of leisure travel continues in earnest, as families and friends further appreciate spending time together given the rare pause on life that the pandemic presented.
What should hoteliers be focused on? What are some potential challenges ahead and how do you suggest they overcome those?
First and foremost, hoteliers must be focused on engagement with their guests, employees and ownership groups. This is the best way to understand what guests are looking for and expect, how employees can be motivated and, most importantly, giving back to the communities they operate in. Engagement enhances the process of improved guest service, employee retention and performance and overall profitability.
Looking ahead, labor challenges will continue to be at the forefront of the hospitality industry. Having the right leaders at the hotel is critical, and the importance of effective engagement with their team members cannot be overstated. By this I mean several things. Effective engagement is instilling a team approach, leading by example, participating in the day-to-day operation, setting expectations and offering appropriate training, being there for one another and creating a positive culture. This is more than just wages and benefits—it is a balance of all these components.
What trends and potential opportunities are you forecasting for 2022?
The demand for leisure travel is expected to increase especially as airlines add flights and overall seat capacity. Short-term group bookings and group meeting markets have been extremely encouraging. We expect to see this not only continue, but to grow throughout 2022 (barring another COVID variant). The hybrid home/office work model will likely necessitate additional meetings either quarterly or at least semi-annually in smaller groups.
Today’s traveler is looking for engaging experiences while being in a safe environment. There is tremendous opportunity to market hotel features and activities that provide opportunities for the guest to understand the local area and further appreciate where a property sits in a market. The focus on experiences could be as simple as utilizing a design narrative of a hotel, sharing the environmental consciousness of the operation or offering a cooking class. Hotel guests want more than just a bed and breakfast experience, they want to feel part of the history and culture of their destination.
Have you seen an increase in the need for asset managers? What are the driving factors behind what you’re seeing?
Thankfully, yes. Today’s market requires an expanded partnership between hotel operators, hotel management companies and property ownership. It has never been more important to have a strategic plan that cultivates a strong culture and understands market dynamics, while also being great stewards of capital. Build it and they will come is no longer the adage. Differentiating your property from the norm will yield results that grow market share, foster guest engagement, and ultimately, profitability.