Executives during a Boardroom Broadcast general session at the Americas Lodging Investment Summit discussed what it takes to attract and retain the right people for the right job as well as how to create an experience that brings in guests and keeps them coming back.
LOS ANGELES—There are a number of challenges facing the hotel industry, but two of the largest ones have to do with the attraction and retention of employees and guests.
During the afternoon “Boardroom broadcast” general session on the second day of the 2019 Americas Lodging Investment Summit, hotel executives shared their strategies on how to make their hotels better workplaces for employees and more desirable for guests.
Attracting and retaining talent
The talent gap is a challenge for the industry, AccorHotels Deputy CEO Chris Cahill said, because while universities have become more helpful providing leadership talent, hotels are still dependent on large amounts of unskilled labor. Those employees come to work and don’t necessarily want to jump from property to property, he said.
Cahill said addressing the problem comes down to hiring the right people in the leadership ranks and providing the right training. This creates a good environment at hotels, which makes people want to stay.
“You can mitigate your turnover in that regard,” he said, adding that there is no magic bullet for maintaining a workforce as it requires constant management of the labor pool.
Attraction of new employees tends to be more difficult with less skilled labor, Cahill said. A sub-4% unemployment rate makes it difficult to find people, and those issues are only compounded by immigration issues and changing demographics.
Having a great team with a strong leader who respects and appreciates the workforce leads to less turnover, said Mike Deitemeyer, president and CEO of Interstate Hotels & Resorts. He noted Interstate is investing in technology around career paths to track employees with high potential.
The company also has the advantage of having concentration within markets—some with six to seven hotels at different tiers—which he said allows people who want to move properties do so easily without leaving Interstate.
The percentage of people who feel comfortable quitting their jobs to find new work is at an all-time high, said Douglas Kessler, president and CEO of Ashford Hospitality Trust.
“People feel confident they can quit their job and move to something else,” he said.
The hotel industry needs to market the opportunities it offers better to attract more employees, he said. In the gig economy, younger people want space and routine, to feel at home where they work and be connected with people. Lastly, they want purpose, and to know they’re contributing value to something bigger.
“Those are all things within our industry, and they’ve been there a long period of time,” Kessler said. “We need to do a better job on the HR side of trying to cannibalize workers from other industries.”
InterContinental Hotels Group CEO of the Americas Elie Maalouf said he hopes the U.S. has low unemployment forever, which means more people are working.
“I’d rather be solving low unemployment issues than high unemployment and low occupancy issues,” he said.
Maalouf said it starts with giving people a purpose. They have to stand for something more than just profit, margins, occupancy and revenue per available room.
“It’s productive, but people need to feel part of something greater,” he said. “Because everybody can find a different paycheck. What they can’t find is a meaningful purpose.”
The guest experience
To drive guest loyalty over time and drive premium rates, companies can’t do something that works at only 100 hotels, Maalouf said.
“We keep testing these things,” he said. “Not a lot makes that test.”
Making a guest experience unique and valued requires offering something different, Kessler said. One way to do that is give guests the ability to have Internet of Things in their guest rooms. They can interact with their lights and room temperature before they check in, he said, but imagine there are various parts of the room with flat screens or white screens.
He gave an example of a guest is traveling to San Francisco who wants that room to evoke a sense of the San Francisco experience. It could have live-streaming video of cable cars going across the screen or pictures of the Golden Gate Bridge, instead of what hotels have today, which is boring, commoditized photos or artwork. That creates a little more of an experience for them at the hotel, he said.
“I think that’s something that may appeal to people looking for something more relevant to them as opposed to the commoditized product that we have now,” Kessler said.
Some customers will always want a more personalized experience, Cahill said, and hoteliers need to leverage technology and data to make that happen. He said this is especially important in the luxury segment, where guests should be given the option to choose from a menu of unique experiences.
From a front-of-house experience, guests want to feel special when they walk into a hotel, Deitemeyer said. They walk into the hotel with the staff already knowing their preferences and have the room set up with food or drinks waiting. The staff can talk about purchase history and recommend golf or a spa, he said. If he can walk into a gym and it has shoes ready for him, Deitemeyer asked why the hotel industry, especially at the luxury level, isn’t using technology to serve guests in a similar way.
Home sharing in a downturn
There are millions of listings on home-sharing websites, Kessler said, and they’ve had a 40- to 60-basis-point effect on hotel RevPAR. That impact has come down over time, he said, and one of the reasons is awareness of home sharing has reached a saturation point.
With pricing the top stated reason for home-sharing use, Kessler questioned what would happen in a downturn. For a home-sharing host, there is incremental cost to bringing a room to market and no marginal cost, he said, so since people are losing jobs or not getting bonuses, it would be logical more rooms would come on board and increase availability. To offset that, more places are approving regulations, legislation and taxes, and there has been a pullback in some of those markets.
In a downturn, Kessler said he anticipates lower and slower RevPAR growth and that home-sharing availability will have a greater impact on RevPAR. It would be similar to having more Uber drivers or other gig economies to supplement their income, he added.
Hoteliers should give home-sharing platforms credit where it is due, Maalouf said, because they’ve built efficient tech platforms and aggregated and distributed the supply well. The content on their sites is good, he said, and generally better than what hotel brand companies use.
The propensity for more people to use home sharing as an accommodation has flattened out, Maalouf said. Citing something he has done in teaching hospitality classes or speaking at forums, Maalouf asked female attendees whether they would be willing to stay in a home-sharing unit on their own. When a minority of attendees raised their hands in favor of it, he said that brands deliver a service they can trust.
“I trust I will take my family to a place where it will be what I expect,” he said. “I trust as a business traveler when I arrive the room will be ready, the heat and air conditioning will work, breakfast is going to be there and the technology is going to work. It will have the meeting rooms. The brand is the trust we are going to do what they expect us to do.”
When pricing goes down, there must be a breaking point where hosts don’t want people in their home because it’s not worth it, Deitemeyer said.
Cahill said AccorHotels’ home-sharing product, Onefinestay, is a totally “concierged” product. Someone greets the guest at the home, and they have an iPhone for the destination that has a one-touch call to the front desk and a full set of instructions on how to use the house. It’s totally customized and like a hotel room by extension. Because they have someone to reach out to, they don’t feel necessarily they’ve been abandoned, he said.
“That’s a product I don’t think would have any impact in good times or bad times,” he said. “It’s the customer looking for a much more residential experience and willing to pay a reasonable price as a substitute for a hotel suite, which historically, especially in the luxury category of hotels, have not really had what I would call a residential suite product.”