Discussion segment for high-end executives – Hospitality
During the “The Hospitality Industry Landscape: A View from the High-End Segment” session at NYU’s 43rd Annual International Hotel Industry Investment Conference, executives gathered to discuss of the current state of the high-end segment.
Moderated by Hotel VP, Content & Creative Christina Trauthwein, panelists included Janis Cannon, SVP, Choice Hotels International; Amy Hulbert, VP, Premium Shops and Brands, BWH Hotel Group; Alex Kuhl, Vice President, Development, Upscale and Luxury, IHG Hotels & Resorts; Diane Mayer, Vice President / Global Brand Manager, Classic Selected Brands, Marriott International; and Angès A. Roquefort, Director of Global Development, Accor.
While no segment has been spared from the pandemic, the high-end segment has benefited from the unique ability to pivot and adapt to the evolution of the traveler, while remaining attractive to investors.
“[The upscale segment] was able – with already lean staffing models, already lean operating models, not depend on the group’s activities, not so much on incoming international calls – weather the storm a little better, ”Mayer said. “And historically, they have provided very strong margins. Room margins are generally stronger than food and beverage margins. So it’s more of a coin-driven product with a bit of food and drink, which means their GOPs, five, sometimes 10% higher on average than high-end or premium products, mean they ‘They are a little more accessible for investments and a little more profitable on their bottom line.
Kuhl noted that segment properties tend to be cheaper to build than the top-of-the-line top tier, but it’s their flexible model that allows them to thrive and stimulates conversations with investors.
“Depending on the location and the competitive segment, you can increase the prices when a more traditional, say mid-range brand is seen as a price cap,” he said.
Cannon noted that in the absence of a price cap, high-end brands have been able to recover quite well, with many hotels being able to achieve high-end rates.
“I think the other benefit is really the total cost of ownership on the profitability side. We’ve actually been able to cut costs and things like housekeeping… we’re rethinking the food and beverage… the bottom line is increasing dramatically, ”she said.
Hulbert agreed, noting that the shareholding rate is key to driving recovery within the segment.
“It’s about making sure that we keep that rate and that we pull that and that we attract the right customer, we get them to be loyal and continue to understand what that high end product is instead of. ‘trying to just lower the rate until we until we fill the hotel, ”she explained. “I think it’s been a really smart strategy as we work to recover here.”
Supporting homeowners has been another key to the recovery, Hulbert said, noting that his company gave its owners a fee cut, a strategy they really liked.
Kuhl added that communication with owners is also essential, along with relaxed standards, discounts for paying on time, deferral plans and extensive renovations.
“We tried to look at it from an owner’s perspective: what are the things that have the most impact on me? And we tried to put pressure on them, ”he said.
Mayer recognized the benefit of creating programs for owners who have hotels that perform relatively well from a guest perspective, to earn their place in additional years of delayed renovation, but also mentioned that there is an opportunity here. innovation.
“I think a big part of what happened is that we got permission from customers [during the pandemic]doing things we could never have done before, ”she said. “Now we have the opportunity to look at different models of housekeeping, maybe by level within the industry. “
Cannon believes this innovation is also visible in technology with better knowledge of customers and what the industry has learned after the pandemic.
“Our opportunity now is to really disrupt the business model,” she said. “If we don’t, the increase in the cost of labor, the increase in the cost of goods, our margins are going to be eroded, so we have to make sure that we protect our margins.”
As for the lessons learned, Roquefort indicated that the pandemic has prompted a reorganization of operations within hotels, allowing customers to be properly received.
“It is important to strengthen the human relationship and human health during this very difficult time,” she said.
In the future, a big part of coin recovery will be understanding the customer now and what their expectations will be in the future: will leisure travel continue? Will business pick up? Or, as the industry continues to question, will a mixture of the two continue?
“I think that’s part of the excitement and the opportunity right now to try to figure out where our mix of activities is really going to play out when we’re more stabilized,” Mayer said.
Hulbert noted that the ultimate goal is to look at everything hotels do and change and just try to integrate smart things, whether it’s tech or just doing what the guest wants.
“Ultimately, working towards a better customer experience, not a watered down customer experience,” she said. “We really want this to be something better for the customer. And I think if we all keep that in mind, we’ll end up in a great industry.