LOS ANGELES — There are a lot of reasons for hoteliers to feel optimistic, and many feel the end of the COVID-19 pandemic is in sight if not quite imminent, but the one issue that continues to temper optimism is a persistent labor shortage that many fear will be the new normal.
Throughout the second day of the Americas Lodging Investment Summit, hoteliers stressed labor is the top issue they want and need to sort out before throwing gas on the fire of the demand recovery.
Many hoteliers noted during the conference that the winners of the next lodging cycle will be those who learn how to do more with less, expecting many workers have fled the industry for the long haul.
Photos of the Day
Quotes of the Day
"If we got back to doing exactly what we did pre-pandemic, post-pandemic, then shame on us."
— Warren Fields, CEO of Benchmark Pyramid, regarding the need to eliminate daily housekeeping.
"Regrettably, of my 17 years in the hotel industry and having attended a lot of CEO panels, I was almost always the lone, the token minority representation of the industry at that level. And that's something we all recognize is wrong, right? We all want to change that."
— David Kong, former Best Western president and CEO.
"At first I was worried, but it didn't really kill Delta Airlines."
— Peter Strebel, Omni Hotels & Resorts CEO, on if it bothers him when people mispronounce omicron as "omnicron."
Editors' Takeaways
It's no secret the hotel industry has a massive labor problem, and many hoteliers are getting creative about how to deal with that, finding various enticements to draw workers to their companies in addition to pledges of improving workplace culture and work-life balance for their employees.
But throughout this week, I've found some hoteliers who have been refreshingly candid about what will ultimately reach potential employees: more money.
During a general session panel on labor, Terrapin Hospitality CEO Tony Sherman laid out a situation his company is currently going through on a property trying to hire a new assistant general manager. He said the salary for the job was initially advertised at $55,000 a year in a high-cost-of-living market, but ultimately had to jump to more than $70,000 to drive interest, and he's still not sure if that will move the needle.
— Sean McCracken, news editor
@HNN_Sean
Hotel deals in the past year have been tremendous, both in the overall number and dollar volume. Several properties traded for more than $2 million per key. That raises the question of whether the same will be true for the coming year. In interviews and in conference sessions, I heard from several hoteliers who are interested in making some deals this year.
Appetite doesn’t necessary lead to a successful purchase. We all know about the capital built up over the past two years targeting distressed assets. When that distress didn’t arrive anywhere near what was expected, that capital went after other deals, driving up prices and cutting into the discounting that otherwise would have happened.
Those that managed to survive, or even thrive, through incredibly challenging conditions are more likely to hold on to their properties, especially since they expect the recovery to further improve performance. That’s likely to continue through this year, limiting the amount of hotels that will come to market. All that competition will continue to drive up the prices for the more desirable hotels. During a transactions outlook session, panelists predicted that those high prices will entice owners who want to take advantage of this competitive transactions market to sell off a property or two. So while there may not be a wave of deals at any one point in time, there’s enough incentive out there to keep the market active.
— Bryan Wroten, senior reporter
@HNN_Bryan
What strikes me most about the hoteliers present at the Americas Lodging Investment Summit this week is that finally, after two years, most people seem happy again. They seem excited and enthusiastic and ready for recovery. That hasn’t been the case for the past several years. The undercurrents of change present in the industry now are fueling this new attitude.
It’s absolutely a golden age for third-party management companies — I spoke to executives at five companies just today who are involved in management company mergers or acquisitions, and I know more such deals are on the horizon.
A more consolidated third-party management landscape will — in my opinion and based on what I hear from a lot of these principals — move some necessary change forward for the entire hotel industry. Operators want to standardize new housekeeping protocols that can be adopted by the whole industry. They want to take advantage of technologies that can be what guests come to expect universally. These are broad strokes of change that, when adopted by many, can address many of the industry’s pain points.
— Stephanie Ricca, editorial director
@HNN_Steph