HB ON THE SCENE: RSS Focuses on Disruptors in the Hotel Industry

WASHINGTON, DC—Disruptors were a key topic at this year’s Revenue Strategy Summit, held at the Affinia Liaison Capitol Hill here. Two disruptors that were discussed in depth were mobile bookings and the sharing economy.

“More and more, guests who would have booked at the front desk are booking on an app in the parking lot,” said Mark Morrison, VP of corporate strategy, Hilton Worldwide, in a panel titled “Disruption 2020: The Digital Marketplace.”  He noted that this behavior will continue and many hotels are playing the game by dropping rates and are, in turn, teaching customers to check their apps before booking.

Barry Goldstein, chief digital & distribution officer, Wyndham Hotel Group, agreed that parking lot bookings have become difficult to manage, but another trend has popped up: more call volume. Goldstein attributed that to changes at Google that make it easier to make a phone call than link to a website on mobile. “Wyndham customers book in a short window,” he said. “This changes not just how we handle mobile, but how we have conversations.”

For his part, Mark Carrier, president, B.F. Saul Company Hospitality Group, said this is good news from the owner’s perspective. “If it goes through voice, we don’t pay incremental fees,” he said.

The conversation turned to the sharing economy. “I’m warming to the idea that Airbnb is a structural threat to our industry in a way many of us don’t realize,” said Carrier. Morrison noted that the company is going after the corporate business traveler in a big way, while Goldstein said that Airbnb is affecting Wyndham’s vacation ownership business more than its hotel offerings. Morrison added that Airbnb would affect neighborhoods and housing first, and then potentially impact hotels.

“The fundamental challenge is the profitability of these organizations and the leverage they have,” said Carrier, noting that hotels have high fixed costs and don’t have the leverage over the margin to lure people with the thought of rewards the way the tech companies can.

“We’re still stuck in the Stone Age,” added Shai Zelering, managing director, operations and asset management, Thayer Lodging, Brookfield Hotel Properties. He added that hotels keep looking for the new amenity that will make the room sexier. “What people want is the technology of Uber and Airbnb,” he said. “For the hotel brands to win, we need to shift resources from traditional sales strategy and focus on technology.” Zelering added that this meant hotel companies should outsource technology.

Zelering noted that with the increase in soft brands, the question has to be asked: “What is the brand relevancy in terms of the cost?” He added, “Expedia has facilitated an easier search; it’s easier for me to go to Expedia than to hop around the brands. The technology is easier to use. That’s where the brands need to step up.”

Carrier echoed the call for innovation. “We have to be far more innovative,” he said. “We tend to fight the battles of two or three periods ago. More nimble organizations are taking profitability out of our businesses.”