Staying Ahead of the Competition in 2019: Why Smart Hotel Owners and Investors Should Consider A Brand Conversion

By Javier Coll Executive Vice President & Chief Strategy Officer, Apple Leisure Group | January 13, 2019

If you ask business leaders to describe what drives the most successful organizations around the globe, they will likely mention concepts such as market insight, organizational adaptability, new product development and customer service. While these ideas may seem to best define a resilient technology company, they are actually quite relevant for hotel owners and operators across nearly every segment of the industry.

Consider this: through the inevitable economic and geo-political fluctuations that regularly impact travel and tourism, the most profitable and enduring properties have been guided by owners and management teams with real market awareness – those who understand when and how to revise their strategies, re-imagine their properties, and restructure their operations.

These hotels have consistently found the right moment to adapt by aligning with new hotel management partners, launching new services and raising capital to upgrade physical structures.

Finally, they have excelled at predicting the needs and desires of travelers in general, and their guests in particular – an example of great customer service in action.

So what does adaptability, market awareness and customer focus look like for hotel owners today? Of course, the answer will vary by region and segment, but one approach has increasingly worked for properties wanting to stay ahead of the competition Рand in sync with guest desires: brand conversion.

While the conversion strategy is not new, it will likely take on new importance in the months ahead, especially in markets where economic and political changes are on the horizon.  It will also be a critical strategy in places where new construction is poised to oversaturate the market with guestrooms. Overall, the market is cyclical by nature, at some point we are bound to experience a downturn, just as we did a decade ago.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.