After more than a year of virtual conferences, the hotel industry returned to in-person events at the Atlanta Marriott Marquis for the Hunter Hotel Conference. It felt like a family reunion, albeit the hospitality family made up of more than 1,000 individuals from all over the country, with others attending the event virtually.
“I feel like it’s overdue, and I’m happy that we can finally do these things again,” Noah Silverman, global development officer, US & Canada, Marriott International, said on the morning of Day 1 during one of the many one-on-one meetings taking place throughout the hotel. “Business travel and group meetings are a key part in what drives our business, and the hospitality industry needs to lead the way. I’m looking forward to the opportunity to spend time with folks in person for the first time in 14 months.”
Beau Benton, president, LBA Hospitality, commented, “I applaud the Hunter family for doing this and to show it can be done—and can be done safely. How can we ask our clients to travel and trust us and to come back to the hospitality industry if we’re not willing to do it ourselves? So, I think it’s huge.”
Safety was a priority, as every attendee had to go through a COVID screening via the CLEAR app and kiosks. Buffet-style food service was handled by attendants and masks were worn in the hotel’s public spaces.
Before the general session on Day 1, Doug Artusio, chairman/CEO, Dellisart Lodging, said, “The people who are [here] are enthusiastic, talkative and really can’t wait to interchange. So, it’s really been interesting even in the first few hours.”
C-suite leaders talk recovery
During the session “C-Suite Conversations,” moderated by Chip Rogers, president/CEO, AHLA, industry leaders discussed a number of topics related to the recovery.
Panelists included Carlos Flores, president/CEO, Sonesta International Hotels Corporation; David Kong, president/CEO, Best Western Hotels & Resorts; Jim Alderman, CEO, Radisson Hotel Group Americas; and Liam Brown, group president U.S. & Canada, Marriott International.
On the topic of vaccine rollout and how it will speed up the recovery, Alderman pointed out that, at Radisson, there has been “great improvement week over week and month over month.
“I think the enthusiasm shows in people ready to travel,” he added. “Having traveled thousands of miles commuting at one point in time from Florida up to Minnesota and driving a two-day trip back and forth, the last time I went to Minnesota was just a couple of weeks ago, and hotel parking lots were full—not every single one that I passed, but most of them.”
Flores shared, “There’s plenty of reason for more than just cautious optimism. April was a lot better than March, and inquiries are through the roof. I think we’re gonna see one hell of a summer. The question will be: Will it be the springboard into the fall? I think that vaccination levels and loosening government restrictions, where kids actually get out of the house, will help tremendously.”
Kong was asked about the current trends that will be long-lasting ones. The use of mobile devices immediately came to mind.
“We’ve dramatically stepped up the adoption of mobile in our industry,” he said. “In 2019, we saw a pretty healthy increase in mobile bookings, but in 2020 the mobile bookings were up 37%. Obviously, we have to really spend a lot of money to capitalize on that trend.”
Best Western is using text messaging to upsell, he noted, which could be adopted by other companies. “There is an arrival message that we send out, ‘Looking forward to hosting your stay. By the way, the check-in time is at 3 p.m.; however, if you decide on an earlier check-in, then we’re going to accommodate you for $10 or $20.’ You’d be amazed at the adoption rate with that. At checkout, we communicate that there’s mobile checkout. ‘Oh by the way, the checkout time is 11 a.m. If you like to arrange for a later checkout, it could be for $10 or $20.’ You wouldn’t believe the amount of money we can make.”
The labor shortage has been a huge challenge as demand ramps up. “It’s driven by many things; it’s a combination of people feeling safe and being concerned about getting ill, childcare issues and the fact that they’ve been out of our business for a year,” said Brown. “Many of our associates have taken different paths, and if you look at it from a competitive landscape in terms of wages and the people we are competing with, many of the biggest employers in the U.S. have moved to a floor of $15 an hour. I think wage competitiveness in every individual market is critical, but you also have to have a ground game at each and every hotel and try to figure out what your strategy is.”
Main Street speaks
The “Main Street Talk” session, moderated by Teague Hunter, featured panelists Corry Oakes, CEO, OTO Development; David Marvin, founder/president, Legacy Ventures; DJ Rama, president/CEO, Auro Hotels; and Mitch Patel, president/CEO, Vision Hospitality Group Inc.
This panel also discussed the labor issue, and Patel pointed out that this has hampered housekeeping efforts.
“There’s big hotels where, on weekends, there has been a spike in occupancy rates [but they] can’t get the labor force,” he said. “We are doing our best on weekends to rent all of our rooms, but there have been rooms that are out of order because we just couldn’t clean them. How much more could we ask of our employees— our general managers, our sales directors—the last 14 months? We had to make the decision to furlough our associates just to survive. Now, as demand is coming back, [the executives] are still cleaning rooms, doing laundry and checking-in guests.”
Besides labor, another challenge coming out of the pandemic has been human inequality, noted Rama. “Just yesterday morning in Greenville, SC, one of our associates who works in our investment office got shot on a bicycle without any reason,” he said. “We have hotels in India, and right now we’re focusing on sending oxygen concentrators [there]; we have 1,200 associates there, and we’re trying to figure out how to protect them. There’s 50 people waiting for one hospital bed, so we had to convert some of our rooms [for] hospital beds. We’re going to face all these challenges, and we’re going to have to be resilient and have to come together and take it day by day. I think the worst is behind us, but let’s also be careful and make the right decisions for our own organizations and for our people.”
Marvin tackled the subject of CMBS loans. “We have assets that are encumbered by CMBS and that’s a very different conversation than in the banks,” he said. “I think the underbelly of CMBS has really been exposed here, and it’s just a structural problem. We’ve had to get on a schedule to repay whatever forbearance via use of the FF&E reserve or debt service relief over a very quick period of time, which commenced far too soon. On the bank lender side, we’ve had far more cooperation. One of the sticking points with CMBS has been the waving of certain debt service covenants, failure of which turns into a cash trap, which then further stresses cash flow and really makes no sense for an asset that was performing well, and would have performed well but for the pandemic.”
Oakes pointed out that, when those banks get to a point where that debt has to be on par, “they’re going to expect you to either pay it down or have some type of transaction,” adding, “Paying down is going to mean a couple million dollars on a $20 million loan. And then on top of that, the brands are gonna have to force us to keep these hotels up otherwise we’re going to quickly lose brand integrity and won’t mean anything to the customer. So, if all that FF&E reserve has been used, that money has to come from somewhere.”
Mendell honored
On Day 2, Gary Mendell, founder, Shatterproof, accepted virtually the Hunter Conference Award for Excellence and Inspiration.
Upon accepting the award from Tom Corcoran, president, TCOR Hotel Partners, who was also not present in the room, Mendell said, “When you first heard of my son passing away and I was thinking about forming an organization to help those with this disease, so many of you reached out and asked one simple question: ‘How can I help?’ You have helped us so much. The hotel industry was the first industry that jumped in when we formed Shatterproof, and because of all of you and your support, we’ve been able to grow so much quicker and help so many more people so much faster.”
He added, “For the hotel industry, I know the last 13 months have been difficult. So many staffing changes, cutbacks in business, so many in our industry lost their life to this disease and our family members, unrelated to COVID. We lost one of our most inspirational leaders, Arne Sorenson, a true friend to so many of us. But, the industry is showing resilience. All of you have worked so hard and I know the next 13 months are going to be so much better than the last.”
A View From the Top
Providing their own insights on how business is returning and the labor market was the “A View From the Top” panel featuring Jim Merkel, CEO, Rockbridge; Mark Laport, president/CEO, Concord Hospitality Enterprises Company; Michael J. Deitemeyer, president/CEO, Aimbridge Hospitality; and Rob Palleschi, CEO, G6 Hospitality.
Deitemeyer and Laport provided operational updates on their companies, and forecasts for the coming months. “We’re eight weeks in our portfolio across the U.S. at 60% occupancy, and we’ve had three weeks of ADR rate growth,” said Deitemeyer. “As we look forward through May and into June, we’re feeling pretty bullish. We are seeing signs of life in business travel, albeit 10 to 20 basis points a week, in the midscale, select-service product, but it’s coming and we’re excited by that.”
Laport made the crowd laugh when he said, “I wish every one of our hotels happened to be in the state called Florida,” and then added, “It gets choppy and dreary by the time you get as far north and east as New York and Boston, but I would say in those states that sun shines, we’ve done better than we thought. Leisure travel has been amazing. The character of the folks that enter our hotels is different than it was a year ago, but we welcome them wholeheartedly and hope it continues at an even faster pace. Business travel is slowly coming back. I’ve walked a few of our hotels in the last week, and was delighted to see briefcases and suits and ties and dresses on a number of our guests that I had not seen at all 60 days prior.”
Merkel provided his forecast for the next few months: “Summer is going to be fantastic. I think we saw last summer that leisure travelers, when they can tell themselves what they want to do, they want to travel, they want to be out and having experiences. People like adventure, and so I think this summer is going to be a very big summer. I think we’re gonna see a big back half of the year sparked by a great summer.”
Like those in other sessions, this panel addressed the labor crisis. “The biggest issue we have when we look across our portfolio is having to, in certain markets, shut off inventory because we have no ability to clean the rooms,” said Deitemeyer. “We’ve got to get the rooms clean and we’ve got to get people to welcome our guests.”
Palleschi noted that companies have become desperate in their tactics to recruit employees. “People are trying to recruit team members at bus stops [or] in the international aisles at grocery stores,” he said. “I think it’s OK to steal from the restaurants and Amazon, but we can’t steal from each other. We’ve just got to help support each other, but it’s gonna be really tough. My hope is that we’ll be ready for business travel come September, where [we’ll be able to service] the more discriminating customers, those willing to pay higher rates.”