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 February 2019...

Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.