HB Exclusive: Q&A with Michael McCartan at ITB

Hotel Business spoke with Michael McCartan, the newly appointed area VP for Europe, the Middle East and Africa (EMEA) for IDeaS while he is at travel trade show ITB Berlin.

It’s been four years since the global ITB confab has taken place, now post-pandemic. What is the vibe in the European hotel community? What are some top concerns and issues on the mind of hoteliers in Europe?
The travel community, in Europe and worldwide, is happy to be back at it, booking business and making new contacts at trade shows. The European travel industry has lagged a bit behind the American in that conferences have been a bit slower to return—but the robust attendance at this year’s ITB, especially in the tech area, shows we are just about there.

The vibe in the global community is cautiously optimistic, as the intent to travel by consumers worldwide is undeniable. There is also excitement at the return of Chinese travelers, who have been absent from the travel scene since the pandemic.

At the same time, as in the U.S., everyone is watching the cost of labor, rising rates, the levels of discretionary consumer spending in a high-inflation environment and the hoped-for recovery of business travel alongside leisure. There are positive signals about this, but we are definitely not fully there yet.

In Europe, we are also closely watching high energy costs, at least partially as a result of the war in Ukraine. As in the U.S., high fuel costs have led to increased airline ticket prices, and we have seen an impact on long-haul travel—which at least partially, has been off by domestic or close-to-home travel spending.

Technology is a big piece of the conference—what is the buzz around new innovation for hotels and other travel providers?
It’s clear to everyone that technology investment is a major key to overcoming the industry’s key operational challenges—now and in the future.

The result is strong forward investment in the tech stack, by brands, owners, investors, technology leaders and start-ups. Some of the focuses are automation and creating new opportunities for increased pricing power, more ancillary revenue uptake for hotels and an creating even stronger guest experience.

The rise of AI and ChatGBT are certainly on people’s minds as well, as are continuing innovations in cloud-based computing and the blockchain.

What’s new in RM, what are global revenue managers focused on?
For hotels, revenue management innovation continues to be seen as a “must-have” in the wake of the pandemic and new operating challenges. More than ever, it’s critical to put advanced revenue management techniques and automation at the center of hotels’ commercial organizations and strategic planning approaches.

One aspect of this is the importance of understating and optimizing the total guest journey. This includes integrating forecasts across departments for powerful operational efficiency.

It’s also critical for hotels to maintain pricing power in the face of micro/macro-economic pressures.

If the pandemic demonstrated anything, it’s that the Rosetta Stone for “doing more with less” is a reinvigorated, re-innovated hotel tech stack.

Why is this an exciting time for hoteliers in Europe and the Middle East? How does operating performance look for the balance of 2023 and what are some “hot” markets?
Now more than ever, it’s become clear that spending on travel is the No. 1 consumer desire worldwide. What was seen as “revenge travel” coming out of the pandemic should now be viewed as a permanent part of the consumer landscape: Seeing new places, having great experiences and gaining the benefits of travel, leisure and business, is simply not something consumers are willing to do without.

This trend is heightened by the continuing merging of asset classes in accommodations and consumers’ willingness to experiment with all of them. With an increasingly remote workforce and the blurring of lines between traditional lodging, short-term stay and corporate housing, there are now more avenues than ever for smart investors to benefit from consumers’ willingness to travel and spend. At the same time, the ante has been raised on seamless, frictionless and efficient lodging experiences, delivered the way travelers want it. There is simply less room for error than there used to be, in taking care of guests and building loyalty.

For all these reasons, operators have reason for long-term optimism in their business, even amidst the shorter-term challenges of war, inflation and the rising cost of labor.

In Europe, traditionally strong travel centers such as London, Italy, France and Spain continue to attract visitors and high consumer spends. Newer markets for discovery such as Portugal, Turkey and other parts of the Middle East are rapidly on the rise.

It’s an exciting time to be a hotelier, as automation and innovation continue to improve not just the guest experience but operating revenues and profits as well.