NASHVILLE, Tenn. — Cost-cutting is a must during a downturn for hoteliers, but the outperformance of resorts versus urban hotels during the pandemic illustrates the importance of not letting service offerings die on the vine.

During the second day of the Hotel Data Conference, discussion centered on profitability and how to sustain it at levels as good as 2019, not necessarily better than.

Hoteliers said this could come in the form of scaling back offerings and introducing opt-in models, in which services won't erode completely and guests still have a choice. Hotels that sacrifice service for profitability run the risk of pushing customers away.

“Frequency and quality of data are two things you have to be maniacal about. You have to be on top of data now more than ever.”

— Charles Macon, Chief Financial Officer, BRE Hotels & Resorts

Compression nights in 2021 are on pace to surpass compression in 2011, two years after the depths of the financial crisis. But the types of markets experiencing compression are changing. Year to date in 2021, 5% of possible nights in markets outside of the top 25 are compressed, compared to just 3% in the top 25.

On the second day of the Hotel Data Conference, three chief financial officers — Wyndham Hotels & Resorts’ Michele Allen, BRE Hotels & Resorts’ Charles Macon and Pebblebrook Hotel Trust’s Ray Martz — shared their insights to tie together in a great way all of the financial concerns the industry faces right now.

It’s no surprise that hotel transactions in the U.S. are following the trajectory of performance. Sun-and-sand resort deals are happening at a faster clip than urban ones. Hearing the CFO perspective on cost-cutting measures and efficiencies also was really interesting, because CFOs of course will always have that profitability goal in mind, but it was nice to hear from them how important the customer experience is, too. The question of whether the hotel industry should charge for different services and amenities a la carte-style came up, and Macon said it’s a slippery slope.

— Stephanie Ricca, editorial director
@HNN_Steph

It is vitally important for hoteliers to recognize the labor issues the industry faces go far beyond not being able to clean rooms because of shortages of housekeepers. During a panel I moderated today called “Labor in Crisis,” Remington Hotels Chief Operating Officer Stan Kennedy said the industry is facing a crisis in terms of overall talent.

As many older hoteliers are retiring and leaving the industry rather than face the stress of a climb back from historic depths and incredible volatility, young people are opting not to enroll in hotel programs at colleges across the country due to poor outside perceptions of the industry. This leaves everyone in the middle being squeezed to do more and potentially pushed out of the industry due to burnout from that incredible pressure. This is a real crisis that will have to be tackled in a unified way by the top minds in the industry or it will only get progressively worse.

— Sean McCracken, news editor
@HNN_Sean

The industry made a lot of changes to adapt at the beginning of the pandemic, and some of those changes will stick.

During “The Buck Stops Here: Learnings From the Industry’s Top CFOs” session, Allen said her team at Wyndham had a head start in planning a reaction to the pandemic in the U.S. after seeing how quickly things shut down in Asia, given the brand’s large footprint in China.

The company came up with a cost containment plan, and shut down some hotels, food-and-beverage outlets and moved to not offering housekeeping for stayover rooms.

Allen said the industry has yet to see if not cleaning stayover rooms will stick, but tech enhancements — such as QR codes at the front desk to make it easier to sign up a rewards member — and not making breakfast a requirement for all hotels will stay.

Pebblebrook's Martz added that relying on technology could help the industry cope with labor challenges and learn how to function with fewer people.

— Danielle Hess, senior reporter
@HNN_Danielle

The word of the day was flexibility. Throughout the pandemic, owners, lenders, franchisees and brands had to learn to pivot day by day. I think Dawn Gallagher at Crescent Hotels and Resorts said it best: If you can’t pivot and accept change to understand what today’s reality is, you will be left behind.

Through these moments of flexibility, relationships have also strengthened. Optimism is growing from owners and brands listening to each other, which Michael Blank of Woodmont Lodging said might not have always been the case. Now, in times of an ongoing crisis, brands have to listen.

COVID-19 ultimately gave hoteliers an opportunity to improve innovation, communication, empathy and the offerings for guests, which all ties back to being flexible.

— Dana Miller, reporter
@HNN_Dana