Lodging Conference Sets the Stage for Potential Downturn Talk

PHOENIX—During its 25th anniversary at The Lodging Conference (TLC), industry leaders gathered here at the JW Marriott Desert Ridge Resort & Spa to discuss the current hospitality climate. Talks ranged from technology to workplace culture to health and wellness, but all discussions led back to one topic: the economy.

Overall, leaders remained hopeful and optimistic, despite a potential downturn looming and industry disruptors shaking things up.

“If you look at the stock market, it’s actually very buoyant and approaching an all-time high as we speak so the economy seems to be OK,” said David Kong, president/CEO, Best Western Hotels & Resorts. According to Kong, he’s less worried about global threats such as Brexit and the trade war, and much more concerned with over-building.

He continued, “You have a situation where you have OTAs, market managers coming to hotels and trying to convince us to lower rates and get better placement. Then you have these new hotels opening up trying to take market share by lowering rates. All of these things are putting pressure on the rate when occupancy is already challenged.”

Others recognized the industry’s cyclical nature, putting a greater importance on company culture.

“A company is a garden, if you’re not pulling the weeds, it will be overgrown,” said Jim Merkel, president, Rockbridge. “That causes culture to break down, people to change, so there needs to be hyper-vigilance in terms of culture. Incredible disruption has happened in the last 10 years. You have to be aware of what’s going on but not distracted. You have to be very deliberate about what you’re doing.”

Brand proliferation could threaten this, possibly confusing and congesting the marketplace.

One of the ways to define and brand and to also strengthen it is technology, which Tyler Morse, CEO/managing partner, MCR Investors, spoke about on day one of TLC. However, this requires caution and hyper-vigilance as well.

“I’m fascinated by an industry that promotes a race to the bottom in terms of service levels,” Morse said. “The industry as a whole wrecks its own margins on a regular basis by continually adding services regardless of the product type. This industry is not comfortable in its own skin with the product that it’s currently putting out.”

Technology has the ability to define company or brand culture, especially faulty tech that ultimately lowers the guest experience. Ensuring efficient tech that keeps up with the rate of change along with instilling a strong, well-defined brand seemed to be what industry leaders agreed will last through whatever the future holds in store.

“You can’t lose your personality and connection to your customer base, and that’s difficult to do when you get to a certain scale,” Ken Greene, president, Americas, Radisson Hotel Group, said. “The only known is that there will be unknowns.”

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