NEW YORK — As life and work patterns change as a result of the pandemic and its aftereffects, so, too, have travel behaviors, and hoteliers are shifting their operations to reflect these new travel trends.
Last summer may have been characterized by too many eager travelers and nowhere near enough staff, leading to service and amenity reductions. But hoteliers speaking on a panel at the 2022 NYU International Hospitality Industry Investment Conference said the remainder of this year is all about operating hotels in ways that reflect how guests are traveling differently now while still commanding high rates and working with leaner staffs.
“Our gross operating profit margins are pretty on par with 2019, mostly because of the ADR gains, but we are operating differently,” said Sloan Dean, president and CEO of Remington Hotels.
Dean and other hoteliers on the panel said they are trying to strike a balance between having smaller staffs on one side and guests who are paying more, staying longer and ready for traditional service and amenities to be back on the other.
Hit that balance and you’re in a profitable spot, he said.
Staying Longer, Spending More
“Not only are people staying longer on property, they’re spending more,” said Peter Strebel, chairman of Omni Hotels & Resorts, which owns all of the food and beverage, spas and additional revenue generators at its resort hotels. “Revenue per available room, revenue per occupied room and total revenue have taken off at even higher percentage growth than average daily rate.”
At Omni’s full-service resort properties, Strebel said guests want and expect pre-COVID-19 service levels, so the brand is responding by reinstating and reopening hotels to their full-service complement. That keeps customers happy and willing to pay higher rates, Strebel said.
Resort operators on the panel agreed that leisure guests are still burning off the steam of pent-up travel demand and are happy to be in vacation mode, willing to pay, but expecting pre-pandemic service levels or more.
“It’s a little like a college-reunion atmosphere,” said John Cohlan, CEO of Margaritaville Holdings. “Everyone is happy to be back and wants to have a good time, but the difference between now and college is that tuition has gone up. So yes, we should include some extras. We need a slightly more elevated experience.”
Dean, whose Remington portfolio includes a mix of full-service and select-service hotels in business and leisure destinations around the country, said guests are staying longer at resorts and leisure hotels, but also at urban hotels, where he’s noticed group guests extending trips one extra day on average.
“Knowing that allows us to staff hotels more conscientiously and monetize the guests on property longer to fight some inflation headwinds,” he said.
Segments Redefined
Speakers said the definition of bleisure travel — adding extra vacation time to a business trip or tacking some remote working days on to extend a vacation — continues to evolve, and they’re recognizing patterns that help them maximize the spend that comes with these unique new trip types.
Local, authentic experiences are back as a top priority for all types of travelers, said Jeff Wagoner, CEO and president of Outrigger Hospitality Group.
And since so much of these new hybrid trip types involve remote work, “you have to make sure you are set up fully, with desks and chairs back in the rooms, and the best internet, to facilitate those working days,” he said.
John Murray, CEO and president of Sonesta International Hotels, agreed.
“We’ve changed some of our meeting space to be more informal, with soft seating and different layouts,” he said. “You have to have the expectation that whether you think someone is a business traveler or a leisure traveler, it’s likely a blend of both so you need to have the spaces and amenities, make sure your tech is up to snuff and communicate your local attractions to everyone. Even if someone is traveling for work and in meetings, they may come an extra day or stay a day later to see the surroundings.”
Dean said he notices more business travelers bringing partners and families along, so Remington is marketing reminders to those travelers about things such as on-property spas and local attractions.
“People didn’t typically bring their spouses on business travel, and now they are, and staying the weekend,” he said. “So we’re very conscious of what we’re selling and knowing we have more things going on besides the room.”
While those types of hybrid guests are taking advantage of spas, pools and kids clubs, Dean said he also sees bleisure travelers booking an extra guestroom to function as an office.
Groups Back, In All Forms
Strebel said both leisure and business group travel have returned to the company's hotels in big ways.
"Now with leisure we find people who aren't traveling with just their own family, but we see several families traveling together for vacation," he said.
High demand for suites and connecting rooms means those room types sell out quickly. This type of "pack travel" also affects other areas in the hotel, Strebel said.
"It changes how you lay out tables in restaurants," he said. "Now we see these big groups of 12 or more people so we have to plan for that with restaurant seating."
And business group travel, too, is "off the charts," he said, with much shorter booking windows.
This wave of pent-up demand for group business travel can give hotels a big boost, at least for now, he said.
"Companies are concerned about culture now, they are getting people back, training new employees," he said. "And those companies are spending more money, adding more cocktail parties, dinners, lunches and activities."
Tech Helps
Technology remains a critical part of the operations toolkit now to further help hoteliers balance changing guest demands with smaller staffs, speakers said.
“We’re operating with about 10% less staff at most of our hotels — some of that is intentional and some isn’t,” Dean said. “We have mobile key, mobile ordering and payment at restaurants, and we’ve redesigned our restaurants to be more efficient. … Between [high] rates and these staffing changes, we’re seeing profitability on par with and in some cases superior to 2019.”
Cohlan said Margaritaville aims to use tech assists wisely, so they can still share human hospitality with guests in places where it can influence spend.
He said food and beverage specifically is "a great touchpoint for resorts, more so even than check-in."
"You may have tech help people check in, but you still want a person coming up to your table with a smile to deliver food and drink," he said. "F&B is a social gathering point and it has to be dynamic."
Dean agreed that technology shouldn't replace all human contact.
"We’ve tried to look into how can we use technology to make us 10% to 15% more efficient, because we have about 10% of an employee shortage," he said. "That's how we're looking at it, rather than fully automating an entire department through technology."