LOS ANGELES — The hotel industry's need to cut costs while also addressing labor shortages aren't likely to go away, and leaders say the industry's greatest needs boil down to a greater focus on innovation and investment.
Speaking during the "Boardroom Outlook: Vision and Leadership" session, Greg Friedman, managing principal and CEO of Peachtree Group, said the hospitality industry needs to technology-based solutions to its pressing issues such as labor shortages.
"We've got to continue to find ways to be more efficient with the operation side, utilizing technology at some capacity to be more efficient at the property level or even at the corporate level," he said. "We're constantly looking at opportunities to be more efficient, but there's not been, from my perspective, a huge win or silver bullet that's going to change the game on operating costs. And we're still a people business."
Mit Shah, founder and CEO of Noble Investment Group, agreed that the industry is calling for innovation, and he hopes the major brand companies can be at the forefront of those efforts.
"I believe we've got a management company challenge in our industry, right now," he said. "Between brands reducing their [positions] on the management side, independent managers trying to figure out how they can grow and scale, and large-scale managers figuring out how to act more entrepreneurial. It's just complicated. But with talent acquisition and technology, enhancing guest experience, taking costs out of the system, it's all an industry responsibility. The brands certainly have a great ability in which to drive that."
John Murray, president and CEO of Sonesta International Hotels, said the industry was forced somewhat to evolve by the COVID-19 pandemic and the demand and labor crises it created. But there are still a lot of things to keep track of on the tech side, including making sure new platforms get adopted and used on property and keeping an eye on broader innovations across the business landscape.
"There's AI and there's a lot of different things going on in the tech world that can help us run hotels more efficiently," he said. "And we need to continue to keep an eye on that, and make sure we're maintaining data security, running a safe business and that we're evaluating everything before we roll it out."
The pace of change in technology can be difficult to keep up with as a legacy industry like hotels, Friedman said.
"It's just a reminder that you can invest all this money into tech, and it can become obsolete overnight," he said. "You're almost better off being late to the party or adopting some of that technology when you know it works versus being early to the party."
Friedman said he's optimistic about the potential for artificial intelligence in the industry, and he believes it's something hotel brands should be investing in significantly and "figuring out."
"I still think it's just early in general with the tech, but I do think that it's something that's going to help over time to gradually improve the efficiency on the operation side and even on the investment side," he said. "We're constantly looking at ways to utilize AI more efficiently. It's more of a novelty at this point in time than actually something that's changing the way we invest capital."
The hotel brands that ultimately "win" will be the ones that make the most of technological innovation and "make it work for all of us, customers and owners alike," Shah said.
"It's going to take leadership from outside our industry and people that think differently and act differently and come from different places in order to do that," he said.