With more than 20 years of experience in the hospitality industry, John Fareed, managing director at Horwath HTL, still jumps out of bed with excitement to conquer the day ahead. Hotel Business caught up with the executive to learn more about the issues he believes are most pressing in the industry, client pain points and his thoughts on the coming year.
Describe your current client portfolio. How has it evolved over the years? Our portfolio of advisory clients at Horwath HTL has steadily increased year-over-year, and currently includes Fortune 500 companies, brands, lenders, developers, REITs, management companies, investors, owners, attorneys and insurers. It’s a diverse list, each focused on various aspects of the hospitality industry.
As for me, personally, I’m currently asset managing a number of fine-dining restaurants and food halls for a publicly traded owner of extraordinary retail environments; providing expert witness and litigation support on a couple of key industry related legal disputes; and assisting with the repositioning of a luxury branded hotel. Over the years, my client mix has evolved dramatically from traditional hoteliers—owners and management companies—to the hotel investment community, including capital groups, REITs and ultra-high-net-worth individuals. I’ve come to understand that as the industry evolves, I must also evolve. In order to do so, I work diligently to understand the needs and challenges of all industry stakeholders—today and tomorrow—and identify, hone and deliver the advisory services that will provide the greatest value.
What are some of the more pressing issues in the hospitality industry today? In my opinion, over branding, lack of differentiation and increased competition are the more pressing issues. Consumers are increasingly demonstrating a lack of interest in hotel loyalty programs, focusing instead on value and unique, authentic experiences. Proof of this is the growth of Airbnb and other players in the peer-to-peer accommodation market. It reinforces the need for hotels to define and communicate their meaningful competitive advantages. I work with clients who understand this to implement a proper strategic market planning process. The process aids in defining the hotel’s most valuable target markets and provides insights necessary to develop the best possible product to win these markets—to include brand, architecture, design, amenities, guest services, etc.—and informs the messaging most likely to deliver competitive advantage. Clients that have implemented strategic market plans have enjoyed significantly better ROI than their comp set.
What have been challenges with continuing to develop the Horwath HTL brand? The biggest challenge was—and, perhaps, still is to some extent—educating the market about Horwath HTL. We’re the world’s oldest, largest and most experienced hotel, tourism and leisure consulting brand. While this is well-known throughout much of the rest of the world—especially in Asia and Europe—we were not as recognized in North America. This is why I became more involved in the industry, speaking at conferences, writing articles and investing in traditional and nontraditional marketing initiatives. It was all about educating our industry on the history, breadth and depth of the firm and all of our service offerings—we’re truly a full-service advisory firm.
I also encountered the same challenges all organizations face these days—how to recruit the best possible talent; how to ensure we are pricing our services competitively; and how to navigate the ever-changing political, economic, social and technological environments. As we worked to overcome these challenges, I utilized precisely the same kind of advice I routinely serve up to my clients: Strive to understand the issue, grasp its full context, craft the best possible solution and maintain the vision, courage, resourcefulness and persistence to see that solution through to fruition—measuring for results along the way and making the necessary adjustments. Thus far, the approach has been working.
Why the hospitality industry? For me, it’s twofold: the people and the travel. I value the camaraderie that comes with this industry and enjoy many long-standing, meaningful relationships with clients and colleagues. I also enjoy experiencing places and cultures I may not have ventured to otherwise.
Why do clients come to you? Unless they are developing a new property or renovating an existing one, clients don’t generally come to me without experiencing some degree of pain. Most prospective client calls are requests for assistance with underperforming assets. Recent examples include a call from a family office executive responsible for a luxury resort in the Caribbean, and the family had check fatigue, meaning they are tired of writing checks to cover the operational losses, or an owner looking for an asset manager who can play nice with the hotel’s branded management company and identify opportunities that may help them achieve a more respectable NOI. No two assignments are the same, but the pain points—as communicated by the clients—remain amazingly similar.
What are your thoughts on where the industry is heading in 2019? I expect technology to become a much more important part of the guest experience, especially in the luxury sector, given the industry’s need to deliver more personalization for elite guests. I also expect the massive shift going on in the industry will continue, as we morph into the future with new offerings designed to better meet consumer needs and wants, such as home-sharing companies like Airbnb, creative communal-focused hotels like CitizenM, or glamping offerings like AutoCamp. While I am hopeful that the rollout of new hotel brands will slow in 2019, experience has demonstrated that we can expect another record year. HB