LOS ANGELES — For a successful venture, it's ideal for all partners involved to be on the same page.
As is often the case, however, some partners can feel each other's goals may be misaligned.
During the latest meeting of the Lodging Industry Investment Council, executives from hotel ownership and management companies spoke about their desires that their brand partners focus on capital projects that generate a return for owners and invest more in technology to improve guest engagement.
The brand standards and property-improvement plans are a great way for large enterprises for create consistency, Aperture Hotels CEO Charles Oswald said. What they don’t do, however, is recognize that there are some companies that are good at maintenance and keeping properties up to date.
Taking a one-size-fits-all approach and saying because something is old it should be replaced isn’t helpful, Oswald said. The brands should try to be more nuanced, looking at the guidelines and seeing how the condition of the property compares.
Waramaug Hospitality is working on a PIP that requires the company to do so much work within 24 months, said Craig Nussbaum, executive vice president of acquisitions. However, there’s also a line in the contract that there’s a fixed renovation cycle management requirement coming up within 25 months.
“Now somehow, ‘Take this PIP and take that sentence and put them together. That’s on you. We’re not going to tell you line by line what it means,’” Nussbaum said. “I think that causes problems, certainly at the transaction level when you’re fighting over what is the [capital expenditure] requirement of the property.”
What would help is a deeper relationship between guest satisfaction scores and those FRCMs and lifecycle renovations, PM Hotel Group President Joseph Bojanowski said.
The brands at times focus on less impactful issues, such as replacing popcorn ceilings, when there are bigger projects that could have a bigger return on investment, said Doug Dreher, president and CEO of The Hotel Group.
“Just educating them at what matters ROI-wise is huge,” he said.
The hotel brand companies have a relentless focus on net unit growth, and they’ll often create a new brand as other opportunities slow to keep driving that growth, Bojanowski said. That moves them more into a marketplace than keeping them a lodging branding company.
That shift leaves many hoteliers who have bought or managed hotels becoming commoditized within the system, he said.
“It was always de-commoditization and fighting that on the [online travel agencies], and now you’re fighting it inside that environment with the brand itself,” Bojanowski said.
The brands could also help by allowing for the booking of experiences in a guest’s booking path, Oswald said. That would allow hotel owners and operators to be more entrepreneurial about what they do to enhance the on-property experience.
There are also a few other things brands could do that other travel companies do, he said. When booking a flight with Delta Air Lines, he’s given the option at the end of the process to add trip protection.
“I bet you my owners could find a little revenue share of a trip protection offering for the 10% of people or whoever it is buy it,” he said.
Dreher said that after a flight from Atlanta to Seattle, he was in an Uber to the hotel when the Uber app had a pop-up showing him restaurants near where he was staying.
“I got nothing from the hotel, the branded hotel,” he said. “That’s good marketing from Seattle. Nothing from the airline. I’m hungry, and here are your options. They can be smarter and better on technology.”
The fastest-growing search engine right now is through artificial intelligence, specifically ChatGPT, Bojanowski said.
“Guest are literally having conversations with AI, and it’s growing exponentially,” he said. “It’s the same trajectory as mobile was growing in 2010.”