Six Potential Challenges and Growth Opportunities in the Hotel Industry

By Stephen J. Renard President, Renard International Hospitality Search Consultants | September 24, 2017

A panel moderated by PwC's Scott D. Berman; Chris Cahill, CEO, Luxury Brands, AccorHotels; Steve Haggerty, Global Head of Capital Strategy, Franchising, Hyatt Hotels Corporation; Kevin J. Jacobs, EVP & CFO, Hilton; Elie Maalouf, CEO, The Americas, InterContinental Hotels Group, and Mit Shah, CEO, Noble Investment Group discussed the industry's growth potential as it related to geopolitical and economic shifts. Most have seen, and believe they will continue to see, moderate growth.

What do three hoteliers and the head of an OTA talk about over coffee? Plenty! Sebastien Bazin, Chairman & CEO of AccorHotels; Mark Hoplamazian, President & CEO of Hyatt Hotels Corporation; Jonathan Tisch, Chairman and CEO of Loews Hotels & Company; and Dara Khosrowshah, President and CEO of Expedia, took a break from the event's main boxing ring to sound off on the big issues affecting the hospitality and travel industries.

Here are six notable insights I took away from the CEOs.

  1. Guests Have Changed

    Today's travelers have to deal with ever-changing factors from online review
    sites to fears of terrorist strikes in major cities. Bazin, whose
    AccorHotels saw revenue fall after two attacks in France last year, noted
    that safety concerns don't seem to affect people's' desire to travel, but
    does affect where they go. "They go elsewhere," he said. "All the traffic we
    didn't get in France for the past 12 months went to Spain, Northern Europe,
    Amsterdam and London." And then there's the internet, with sites like Yelp
    and Travelocity offering reviews of everything from restaurants to hotels.
    "User-generated content is now like word-of-mouth on steroids," Khosrowshahi
    said. This can sometimes be bad, he said, but transparency can also be
    beneficial. "You have more choice than you ever had, and you have more
    information." But, he acknowledged, with increased choice comes some pricing
    pressure. "From an industry challenge perspective, there will be pricing
    challenges," he said. "But usually, lower prices spur demand, and I think
    you're seeing that happen.

  2. So Has Their Spending

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Coming up in April 2019...

Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.