Passion for HosPitality
EDITORIAL Jeff Weinstein , Editor In Chief 1.312.274.2226 E-mail : jweinstein @ hotelsmag . com
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INTERNATIONAL ADVISORY BOARD Nakul Anand Executive Director , ITC Ltd ., Gurgaon , India
Stephen Bartolin Chairman , The Broadmoor , Colorado Springs , Colorado
Geoffrey Gelardi Managing Director , The Lanesborough , London
Kirk Kinsell President & CEO , Loews Hotels & Resorts , New York City
Alex Kyriakidis President and Managing Director , Middle East and Africa , Marriott International , Dubai
Christopher Nassetta President and CEO , Hilton Worldwide , McLean , Virginia
Monika Nerger Chief Information Officer , Mandarin Oriental Hotel Group , Atlanta
Paul Sistare President and CEO , Atlantica Hotels International , São Paulo
Susan Terry Vice President Culinary Operations , Hyatt Hotels North American Operations , Chicago
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Data versus people
Interpreting hotel-related data is never easy , but as I sit in my office and read the news I am sensing a shift as supply starts to catch up with , and even outpace , demand in markets across the U . S . to London , Dubai and China .
In London , HVS reports that 7,000 hotel rooms are scheduled to open in this year as occupancies levels continue to fall , which will undoubtedly put additional pressure on rates .
In the U . S ., Green Street Advisors recently suggested real estate values in many U . S . markets might have peaked with decelerating growth potentially causing values to dip 5 % to 10 %.
Inventory continues to pile up in the UAE and China , and while there are bright spots such as Mexico , rebounding Spain and other select markets , it feels as though growth and performance will not be as robust in the near term .
When important industry investment conferences like the recently completed Americas Lodging Investment Summit ( ALIS ) are titled , “ Where ’ s the peak ?” I think it tells you the question has already been answered .
Not all the headlines and data are negative , however . Very interestingly , Hilton recently commented that it has negotiated a better deal with Expedia , including the ability to offer lower rates to HHonors members . This has the potential to drive loyalty and shift booking patterns . When Marriott slides Starwood properties into its portfolio it will no doubt increase its leverage with OTAs , as well . As Hilton CEO Chris Nassetta said at ALIS , the industry must reclaim its direct relationship
with customers . “ We ’ re crazy if we don ’ t ,” he said . This cannot be overstated .
Just recently , STR released controversial research findings suggesting there is no direct correlation between Airbnb ’ s presence and hotel performance in New York City . During strong demand nights for Airbnb units , there was no pattern of adverse effects on hotel occupancy or average daily rate . In fact , hotel ADR runs at a significant premium to the average Airbnb rate , particularly during peak demand periods . So while we read about how the industry is yet again burying its head in the sand , I choose to believe Marriott CEO Arne Sorenson , who continually says Airbnb does not impact his decision-making .
So , net-net , maybe the industry has reached another peak , but it is unlikely to fall off a cliff . It may see more declining data in 2016 but nothing that will cause panic , which leads me to one last point , one that industry leaders make time after time : Surround yourself with the best people to run your daily businesses .
If you need further convincing , read a new book , “ Dancing at the Fountain ” from Oak Tree Press . Author Conor Kenny relates hoteliers ’ unique experiences and writes about their hard work , focus on service , attention to detail and love of people . If you get that right , data be damned .
Editor In Chief
www . hotelsmag . com March 2016 HOTELS 9