PHOENIX — Record-high room rates led the hotel industry’s recovery out of the pandemic as travel demand surged beyond 2019 levels in some segments. What jeopardizes this steady demand isn’t necessarily the higher cost of booking a hotel stay, but rather deteriorating customer service scores paired with the price.
Guests are expecting the same fundamentals as before the pandemic, but the margin for error is smaller given the higher rates, IHG Hotels & Resorts Chief Operating Officer of the Americas Jay Caiafa said during the “Leaders in Hospitality” panel at The Lodging Conference.
“You look at cleanliness, safety, great service, positivity, strong loyalty program — they’re still looking for all of that. That is non-negotiable,” he said. “The traveler is becoming more unforgiving. You notice in those situations, I hear them complaining about rate combined with bad service or disappointing experience.”
It's become more challenging to provide the level of service guests desire as most hotels across the U.S. are short-staffed, Remington Hospitality CEO and President Sloan Dean said.
The root of the problem is that demand is growing while the supply of the workforce is shrinking, placing untenable expectations on the on-property staff. Dean said productivity and automation need to increase to address the issue.
“The solution is productivity sped up the last three to four years 8% to 10%. Everybody had huge productivity gains. How long is this sustainable? Well, automate — that’s actually part of the answer is automation, AI, etc. Job replacement: It’s coming, it’s now and it’s happening,” he said.
Automation can help with some jobs, but others, such as housekeeping, have to be done by a human. Immigration reform that allows more potential workers into the U.S. could help, Dean said.
Bharat Patel, chairman of AAHOA, said advocacy from hotel leaders on immigration could help bring back some semblance of normality in staffing.
“There’s a lot going on in the world, but for us, in our industry … hospitality leaders and front-line individuals need to step up and say, ‘We have to have a shift,’” he said.
Greg Friedman, chief executive officer of Peachtree Group, said his company’s hotels are about 85% to 90% staffed to optimally service guests, which is creating burnout among employees, especially those in leadership positions.
The hotel industry needs to shift the perspective around it from one that laid off millions during the pandemic to one that doesn’t have any ceilings on opportunities, Caiafa said.
“We have to reeducate them. This is an industry where people can build generational wealth, where they can come from an hourly rate and run a public company. That message is not out there,” he said. “What’s out there is 5 million people being laid off. We’ve got to collectively rebuild that.”
Caiafa said to rebuild the industry’s reputation, hotels need to focus on “attracting, training and retaining talent.”
Hotel Association of Canada President and CEO Susie Grynol said in trying to attract workers back to the industry, they targeted 18- to 24-year-olds and tried to identify what people of that age range want out of a job today. They learned that this demographic values a company that shares the same personal convictions and principles.
In job descriptions, companies can do a better job of exemplifying these values and the perks of working for a hotel, she said.
“People want those Instagrammable moments. Travel is very cool. They want to work for a company that they can relate to,” she said. “We’re out there still on LinkedIn talking about ‘here’s the job’ and ‘here’s how much you get paid’ …. We’re not putting in the window this incredible industry and how cool it is.”
Customer Expectations and Wants
One of the biggest shifts in travel over the past few years has been the demand for experiential travel, the panelists said.
“We've got a number of different experiential categories of travel. That's probably been a big shift,” Caiafa said. “When folks travel, they're looking for different experiences.”
Friedman said there’s been a surge in demand for localized experiences, and it can lead to opportunities for higher daily rates if hoteliers can cater to those wants.
“That's why we're investing in a lot of these soft brands because we see benefits of being able to really customize … that experience,” he said.
While the baby boomer generation prefers consistency in the Marriott and Hilton brands, younger generations lean toward unique experiences at independent and soft-branded hotels for, among other reasons, Instagram fodder, Dean said.
“That's why you’re seeing brands like Autograph, Curio and Indigo, etc., be so successful for the brands is because they want ... unique and local,” he said.
However, those guests still want to be able to rely on the level of service that comes with a traditional branded hotel, said Danny Hughes, executive vice president and president of the Americas for Hilton.
“I totally agree with the independent hotels and the more collection hotels, people experience it, but they want to know the shower is going to be great. They want to know the internet is going to work. And the other thing is they want to know if something goes wrong, there's somebody that can deal with it,” he said.