Hotel executives sound off on industry’s new normal
 
Hotel executives sound off on industry’s new normal
14 FEBRUARY 2018 8:38 AM

From cycle dynamics to social responsibility and consumer trends, hotel brand executives, owners and operators share their thoughts on what makes today’s operating environment different. 

LOS ANGELES—Given the prolonged period of positive revenue-per-available-room growth, record-setting hotel demand and a generally positive outlook on the U.S. economy, hoteliers continue to be optimistic about their business.

Hotel News Now editors asked brand executives, hotel owners and hotel managers at the recent Americas Lodging Investment Summit to answer the question: “What is the new normal for your business?”

Geoff Ballotti, president and CEO of Wyndham Hotel Group
“I think what it means is there has never been a period in this industry where all of the (key performance indicators) have been more stable and have been more positive than they are today from a stability standpoint. … October was the first month in the last three years where new construction starts, according to STR last week, were actually lower than they were in the months prior, year on year. What that means is, the outlook in terms of the new normal could not be more optimistic than it is today.”

Eric Danziger, CEO of Trump Hotels
“The new normal is … to be responsible. For us, the beauty is that the decision-making group is sitting right here. We listen and react today. We fix it today if it’s wrong. The premise of this business should never change, which is to have great people, providing great hospitality, period. That’s what customers want.”

Jeff Fisher, president and CEO of Chatham Lodging Trust
“We believe that maybe the cycles are a little flatter than prior cycles. Prior cycles, really when you think about it, had severe downturns, usually occasioned by some external act—9/11, the financial crisis, ’08. A lot of people think some of the downturns (are) always attributable to new supply, but we’re really not in that kind of a supply environment that in and of itself is going to take RevPAR down substantially. So barring an external event, barring GDP dropping in a big way or some other financial situation occurring, we may be in a flattish to low- to mid-single-digit RevPAR environment, which just means to us you better really watch the nickels and dimes. You better be cognizant of expense control and at the same time, maximize your market share, get the best RevPAR and RevPAR index and be better than your competitors in all ways.”

Ken Greene, president of the Americas for Carlson Rezidor Hotel Group
“I don’t think there’s anything normal about what we’re doing. There is no normal at Carlson right now—it’s a whole new company, a whole new day. There’s not one darn thing we’ve done in the past we have to do in the future. We’re turning over every rock, questioning every way we’ve done business. Our whole strategic plan starts and ends with the owner. We’re about to move onto a whole new platform. We are defining a new normal.”

Leeny Oberg, EVP and CFO of Marriott International
“When I think of the new normal, I think in many respects you look at where we are in the economic cycle. We’re in year nine of what is the recovery. That puts us in the space of being fully recovered from the prior recession, but also in the land of wondering exactly how long this will go on. I think it’s also interesting to see what’s going to happen to pressures on the cost side. Are we going to have inflationary pressures that also impact your business there? In a period where you’re experiencing what we would consider modest RevPAR growth, your ability to really deliver profits and drive returns on those is critical.”

Charles Oswald, president and CEO of HP Hotels
“A piece of the growth rate we’ve seen and how the cycle has extended so much. Obviously, a tree doesn’t grow all the way to the sky. There’s probably a limit to the cycle, lest we forget, but we anticipate tax reform and some of the other pro-business policies are going to play into extending the innings in this game.”

Kerry Ranson, chief development officer at HP Hotels
“The new normal has probably been the normal for the past two years. There’s a different investor that’s in our segment. I think it’s a different commercial real estate investor that has made us look differently at our assets and how we place the value of the asset and how we run the asset with the end in mind.”

Jamie Sabatier, CEO of Two Roads Hospitality
“For me, the new normal is the acceleration of everything we’re seeing. We as consumers, who sit at home in our pajamas and jump on to Amazon, are only going to have heightened expectations based on those experiences. Whatever the best experience we have in any walk of our life, is what we’ll expect to happen (everywhere). There will continue to be a need to do things more quickly, better, more personalized, and you’re going to have to do it with fewer resources and where you’re feeling more stretched. I don’t see us going backwards on any of that. … So for me, the new normal is understanding that we’re going to have to be more creative, more thoughtful, more innovative, move more quickly and do a better job at everything we do. It’s why innovation is such an important part about how we look at things. We have teams behind our brands looking to take what we’re doing and make it better, thinking about three years from now, or five years for now. That for me is the new normal.”

Jeff Wagoner, EVP of hotel operations at Trump Hotels
“There’s an interesting phenomenon going on with new brands—there’s a lot of them, and that’s the new normal. You have to figure out how to differentiate yourself to be successful.”

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