PHOENIX—On the second day of The Lodging Conference, held at Arizona Biltmore, several industry executives, in front of a large crowd, joined Don Landry, owner of Top Ten Hospitality Advisors, on the main stage at The Lodging Conference to discuss trending industry topics, including ever-evolving technology, short-term rental regulations, labor issues and brand challenges.
How Much Technology is Enough?
With regard to technology, guests are demanding more from properties. On select-service, specifically, Jon Mehlman, president and CEO of Hospitality Investors Trust, said owners in this segment are in the “free business” (these owners provide free parking, free points, free workout facilities, free breakfast). Despite these complementary amenities, guests want more technology from properties: more USB ports, more power outlets, more coffeemakers. These additional technology costs are impacting CapEx reserves at properties significantly, he said.
Brands are continuing to use technology to win over guests in competitive markets. “I do think the brands try to ‘out tech’ each other, which ends up costing owners a lot of money,” said Dave Johnson, chairman and CEO of Aimbridge Hospitality. “I think we’ve had more failures in technology in our industry than we’ve had success.” He hasn’t seen a rise in technology demand from his guests.
Short-term Rentals Are Being Regulated
Policymakers have been taking action on short-term rentals in cities across the country, including San Diego, Boston and New York City. “When you look at the top markets around the country, most of those top markets have now taken regulatory action, and I think that’s the right thing to do,” said Katherine Lugar, president and CEO at AHLA. Other markets, including Washington and Los Angeles, will be taking up the short-term rental issue in the coming months, she added.
Labor Continues to Be an Issue
The labor shortage is still a concern among industry executives. “The real issue is that there are too many jobs that haven’t been filled in the hospitality space, so in 2009 there were 300,000 job openings for hospitality, and now, in , there’s 850,000,” Mehlman said. The industry’s growing problem has yet to be solved.
“We’ve talked a lot about technology systems and all that,” Eric Danziger, CEO, Trump Hotel Group, said. “We could just kind of turn all those off if we don’t solve the labor issue.”
The industry needs to find ways to make the hospitality business appealing to new talent, “otherwise we’ll be sitting here having the best technology on the planet and nobody to execute it,” he said.
Let’s Talk About Brands
Brands aren’t going anywhere anytime toon. With regard to driving profitability to properties, one of the key drivers is distribution, which is where brands come into play, said Liam Brown, president of franchising, owner services and MxM select brands, North America for Marriott International.
Some executives believe there are too many brands. Other leaders disagree and point to ever-changing consumer behavior as the key driver of brand proliferation.
“I’d like someone in the audience to tell me how many brands of Tide, the laundry detergent, are there?” said David Kong, CEO of Best Western Hotels & Resorts. “How many varieties do you think Tide sells? 30? 40? 56 varieties. Why does Tide need to sell 56 varieties? Well, because they know nowadays people want things customized their way, right?”
Are brands or management companies better at managing properties? The answer is the following: It depends.
“I don’t think there’s a canned answer,” Danziger said. “I think you should be guided by doing the right thing for the owner.”