Voice of the Restaurant Industry
At the American Hospitality & Lodging Association (AHLA) Hotel Industry Leadership Panel earlier this month, a panel of veteran hotel executives concurred that, although no dynamic or dramatic upswing is on the horizon, the sector as a whole will enjoy moderate growth and gradual improvement over the next two years. Demand is up, supply is tight, local governments are helping with development projects, and staying one step ahead of online travel agencies (OTAs) is still a challenging game of cat-and-mouse. Hotel companies are placing an ever-increasing importance on securing the enormous amount of quality talent required to power the lodging industry through the next ten years.
“It’s very positive for the industry,” stated Amanda Hite, president of STR Global, the industry’s leading tracker of supply, demand and market share data. “Demand is back, especially for the single business and leisure traveler. Hotels have more pricing power. In the next year, supply is estimated to increase 1.13% while demand will increase 1.88%.”
Jim Chu, senior vice president, franchise relations for Hyatt Hotels shared that Hyatt was at capacity but their focus was still on improving rack rate and average daily rate (ADR) so that growth is balanced. Ron Vlasic, regional vice president at Kimpton Hotels concurred that revenues are up from individual business travelers, but that they have to work harder to find the group business.
The panel engaged in an intense discussion on human resources, and the need for talented and passionate people to join the lodging business. “The industry employs 255 million people worldwide, and by 2020 will employ 322 million,” said Johnson. Chu added, “We’re hiring 10,000 people in the next ten years. This is front and center. Recruitment and retention are #1 and #2.” With every hotel, resort and casino seeking the “best and brightest” from a very limited pool of talent, you’re going to want to make sure you have a competitive edge.
Successful recruiting at the volume the industry needs is not something that can be approached on a case-by-case basis. It will be critical to find the right long-term partner who understands your organization and know how to find the top talent you’ll need. Click on the video to find out how we do it.
On the subject of supply and new development, there was much discussion about the growing influence of local communities seeking to bring new hotel projects to help their cities. Said Vlasic, “I manage in six markets. Local government has a big influence, and business-friendly markets outperform.” Nancy Johnson, executive vice president of Carlson Rezidor and AHLA chair added: “There is an increasing trend of local communities desiring new hotel construction and helping developers secure financing for new projects.”
OTAs are still a hot topic. Stat expert Hite pointed to STR’s study which concluded that only 10% of all hotel bookings come through OTAs, and that revenue managers have to look at different channels and compare them to industry standards.
Johnson, who has extensive experience navigating legislation for the industry on Capitol Hill stressed that you have to separate the distribution issue from taxation. She urged the crowd to contact their congressional representatives and ask them to hold OTAs accountable for taxes on the mark-up they charge to consumers, because that tax going unpaid is an unfair advantage against hoteliers. The Hospitality Sales & Marketing Association International (HSMAI) has made available an outstanding resource: Distribution Channel Analysis: a Guide for Hotels is a 2012. This publication provides extensive data and intelligence on OTAs, helping hotel operators understand the increasing complexities of online travel sites and the consumer decision-making process.
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