Hotel CEOs: We’re in a ‘golden age of travel’
 
Hotel CEOs: We’re in a ‘golden age of travel’
15 JUNE 2016 8:51 AM

CEOs from some of the largest hotel companies said members of the industry are living through a golden age of global travel that is expected to continue to grow for decades.

NEW YORK CITY—Some of the hotel industry’s most well-known and influential executives shared their opinions on the state of the industry and what hoteliers could be doing better at the recent NYU International Hospitality Industry Investment Conference.

Here’s a look at some of the topics those executives touched on during the series of general session panels.

A golden age for travel
While soft performance during the first quarter fueled some skepticism about the trajectory of the industry and many are now projecting slower growth going forward, hotel CEOs were adamant that things have simply never been better.

Arne Sorenson, president and CEO of Marriott International, said the outlook for global travel growth is particularly strong and should remain so for the next two decades.

“There is this extraordinary growth from the demand side because of a growing middle class around the world,” he said.

That demographic shift—coupled with baby boomers traveling more as they retire and millennials focusing more on travel than accumulating wealth, houses and cars—is a sign that this is truly a special time to be a hotelier, the CEOs said.

“I think it’s hard to debate that it’s not a golden age of travel,” said Hilton Worldwide Holdings President and CEO Chris Nassetta. “One, you have a demographic tsunami; two, I guess the way I’d describe it is you have a psychographic tsunami. You have probably two generations coming up … that are very focused on experiences, traveling and seeing the world and interacting with people in a way that’s much more intense than potentially the generation or two before them.”

The value of letting your people be themselves
When asked about the sharing economy, Hyatt Hotels Corporation President and CEO Mark Hoplamazian didn’t focus on distribution or supply issues. Instead, he mentioned how the traditional host experience through Airbnb can offer an authentic human interaction with guests.

He said that should be a focus within the hotel industry as well.

“It’s about letting (employees) be more who they are,” Hoplamazian said. “That means taking away things that historically have been very carefully scripted experiences. Authentic experiences can’t be scripted, so you’re going to have to actually let people be themselves and bring their whole selves to work.”

He said this manifests in multiple ways.

“It includes letting them decide things like their grooming standards and their uniforms,” Hoplamazian said. “It’s about letting people self-determine what they’re going to do and how they’re going to bring themselves to that equation and into what they’re doing.

“We’ve gone through the last three years basically taking away the scripts, undoing a lot of operating procedures and trying to get everyone basically re-grounded to say, ‘Be human first.’”

Other lessons from the sharing economy
Christophe Alaux, AccorHotels’ CEO of HotelServices for North America, Central America and the Caribbean, discussed why his company made a move into the sharing-economy space with the purchase of Onefinestay in April.

Alaux said that eventually his company would like to see Onefinestay establish a presence in every major city across the globe, but AccorHotels officials don’t simply view it as a luxury-focused equivalent to Airbnb. Instead, he said it’s a complement to the company’s overall business and helps it focus on the guest experience.

“It was important for us that … we don’t become commoditized,” Alaux said. “Whatever investment we make would be in an industry or a group of brands that provide ideal services.”

Both the Onefinestay purchase and AccorHotels’ pending merger with FRHI Holdings, which owns the Fairmont brand, represent a move into the luxury space.

“It helps this luxury positioning that we need to create,” Alaux said. “Because we know that in the hotel industry, like in retail, in fashion, like in everywhere, luxury gives you a premium, whatever the price and market cap. And we need that.”

Building consumer trust
Richard Solomons, CEO of InterContinental Hotels Group, said consumer trust is “at the heart of every business and brand” and is of high importance for hotel companies. He said that often comes down to how companies handle their loyalty programs.

“We all have loyalty schemes, but how do you make it meaningful?” Solomons said. “We can generalize about customers; you can generalize about generations, but actually we see it across the board. People want to feel connected to the brands that they trust and spend a lot of time with.”

He said this means loyalty needs to amount to more than accruing points.

“Yes, give them points. People want points. They want rewards for staying,” Solomons said. “But, engage with them much more. That’s what we’re seeing. And there are many ways of doing it. You can allow them to put reviews on your site. We allow interaction between members of our loyalty scheme.”

Diversity in leadership, workforce
CEOs speaking during the first of the two panels—Sorenson, Nassetta, Solomons and Choice Hotels International President and CEO Steve Joyce—acknowledged that they weren’t a particularly diverse group but universally acknowledged that effort must be put into cultivating diversity in the workforce and in leadership positions.

“We are serving a massively diverse customer base,” Nassetta said. “Simple logic would say to me that if we don’t have diversity within our organizations at every level, over time we’re going to do not as good a job as we could do otherwise at serving.”

Nassetta described it as a “business imperative.”

Sorenson said Marriott has had “an extraordinarily diverse workforce for a long time,” but he added it’s important to quantify that to make sure that statement rings true. He said 40% of the company’s positions that report directly to him are held by women, and the board also comprises 40% women.

“We can keep track and make sure we deliver against it,” Sorenson said.

He said that diversity in the workforce should be a continued area of focus and improvement, especially as the industry takes on a more global focus.

“We look at every level throughout the organization and say, ‘What does diversity look like?’” Sorenson said. “And you look further down in the organization and say, ‘Where is the talent … that we can start to create career paths for?’”

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