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Greg Juceam
driving revenues and managing expenses . Additionally , hotels with the best guest value proposition in the competitive set ( i . e ., strong location , asset quality and / or service excellence relative to price ) will generate higher social-review scores and will have a better chance to gain market share ; conversely , hotels with weaker guest value propositions that benefitted from the rising tide during the upcycle often get exposed in this part of the cycle . Gary Gray , CIO , 24 / 7 Hotels : On the investment side , investors will be trying to solve for the dislocation in the capital stack . Many owners with fixed-rate loans coming due will face a debt market offering loans at more than twice their current rate ,
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Gary Gray |
while loan proceeds will be significantly diminished by lower LTVs and lender required reserves . Brand required capital improvement projects will add further complications . Investors will likely be sifting through a lot of deals to find the few opportunities that are encumbered with strong brands in growing markets that have strong sponsorship . Meanwhile , much of capital providers ’ focus has shifted to pursue preferred equity investments or mezzanine debt to secure equity-like returns and hedge some of the risk . Lindsey Ueberroth , Preferred Hotels & Resorts : Talent and labor will continue to be one of the biggest challenges for the hotel industry , especially in boom markets where competition is strong with new product coming into the market . With ADR holding strong , the traveler expects nothing short of perfection and , in the luxury segment , hyper-personalized service . It is extremely hard to find that talent and we are seeing retention being an issue , as well . I believe we need to come together as an industry to raise more awareness around how the hospitality industry is an incredibly reputable profession and engage universities and hospitality schools to elevate their education opportunities and assist us in the recruiting process . Warren Marr , PwC : Average daily rate growth is expected to be close to declining inflation |
levels and labor costs are increasing at above inflationary growth levels , which can result in margin erosion . The hotel industry can prepare for this by being proactive in developing enhanced efficiencies in operations , such as food and beverage , housekeeping and self check-in . Implementing this without compromising the guest experience will be a challenge , but if it can be achieved , will benefit the bottom line . Ryan Rivett , My Place Hotels : Workforce stability . The SWOT matrix on this subject is a little heavy on the W and T from the perspective of both sides of the paycheck . Regulatory , economic and social factors continue to add new weaknesses and threats for businesses , while chaotically invading the
Warren Marr
relationship dynamic and the integrity of communication between businesses and their most valuable stakeholders , employees . Value and validity of increased pay , abstract benefits and flexible schedules , aside , the definition of a “ good job ” is more ambiguous than ever , and for an industry that relies so heavily on the consistency
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and dedication of people , I believe that the objective to make a career in hospitality is increasingly lost on our workforce . Hoteliers must shift their focus from filling shifts to creating careers , leaning into the most dedicated employees and allocating time to career-focused leadership development . Chris Hemmeter , Thayer Ventures : Managing changing channel dynamics and associated costs will become more and more complicated as the major OTAs continue to roll out their AI tools and techniques . Operators will be challenged to find their footing and will likely come to realize that competing in the emerging AI world depends on getting their data house in order first . Those who tackle their data problems most effectively will have a competitive advantage .
HOTELS : What does the hotel industry do poorly that if it did better would result in a better experience for guests and higher returns for owners ? Conversely , what is the hotel industry great at ? Danny Hughes , EVP and president , Americas , Hilton : While the last few years have resulted in strong performance under extraordinary conditions , customer feedback consistently shows that our guests want the hotel industry to get back to the basics of hospitality . Ultimately , this means that guests expect the fundamentals of hospitality to be delivered exceptionally
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Jan / Feb 2024 hotelsmag . com 9 |