Entering a new year elicits ideas of evolution—reinventing yourself and your business. What will 2024 bring for the industry? Where should hoteliers focus their resources? In our latest Hot Topics session in partnership with Entegra, thought leaders discussed the new year and the challenges and opportunities it may bring.
Moderated by Glenn Haussman, founder/host, No Vacancy Live podcast, the panelists included Jeff Porterfield, SVP, client services/chief customer officer, Entegra; Natasha Scott, VP, operations performance and strategy, IHG Hotels & Resorts; Bryan P. DeCort, COO, Hotel Equities; Richard Sandoval, VP, operations, Spire Hospitality; and Adam Cannon, chief brand officer, G6 Hospitality.
Scott kicked it off with some opportunities she’s seeing for 2024 and for guests.
“What we’ve seen in the past few years is that even in the darkest days, there continues to be light in the industry,” she said. “The foundation of travel remains strong; experiences and what guests are looking for are well-positioned. The fundamentals remain strong, and we can capitalize on that to deliver great guest experiences.”
DeCort is also bullish on fundaments and is excited about consumer trends—think unique and immerse experiences leading demand, along with corporate travel picking up.
“We think as the economy improves and fundamentals improve, that’s good for everybody,” he said. “In terms of rate growth, we continue to see that year-over-year and it helps us offset some of that inflation and wage pressure. There’s no question that folks are traveling again; corporate travel is coming back we’re excited for 2024 and the prospects it brings.”
Cannon is optimistic for this year but pointed out the industry’s double-edged sword: With a 4% rate gain and 4% RevPAR gain, this means hoteliers are not getting that much from occupancy. However, he sees great opportunity, especially on the West Coast and in the extended-stay segment.
“Extended-stay is running about 10 points occupancy premium to transient, you put those two things together there are opportunities,” he said. “We were still doing pretty well at this point last year, and we still have some tough things in Q1 to get through. But once spring hits, I think there’s going to be a lot of opportunity and a lot of demand out there.”
Sandoval reflected on last year, noting that it was supposed to be a return-to-service but somehow turned into the year of the lender, with interest rate impacts that the industry will still feel in 2024.
“When you do 4% and talk about wage pressure and inflation, margin management is still a big deal,” he said. “One of the big factors—when we talk about a return-to-service—is getting more experiential and back to basics. One of the basics we’re focused on this year is leadership at the middle-management, department-head level.”
Sandoval said his team plans to get middle management focused on the important and not the urgent. This means having a leadership plan that allows for margin management so they can focus on their teams and get the guest experience delivered.
Managing margins will be crucial this year with the rising cost of goods and services, all while labor issues still loom in the background.
“We recognize that operators have to be very nimble and ready to adjust their strategies,” Porterfield said. “We allow operators to hit the easy button for their procurement needs, and allow them to spend and promote talent and spend more time with their customers.”
How exactly is that executed? Porterfield explained that Entegra looks to leverage size and scale, providing savings to its customers with full transparency.
“Clarity is the key to inflationary times and I think that level of transparency allows our customers to optimize their purchases a bit better, to see all the moving pieces and allow them to make decisions that favorably impact your bottom line,” he said.
For more on the Hot Topics session, check out the February issue of Hotel Business.
