The hotel industry’s heaviest hitters – C-level executives from the largest brand, ownership, management and development groups – gathered again in Los Angeles this week for the annual Americas Lodging Investment Summit (ALIS), a conference that typically sets the tone in terms of industry sentiment for the year ahead.
The emerging descriptor for 2024 appears to be “a new normal,” suggesting all the changes brought about by COVID – longer stays, higher labor costs, higher rates – are here to stay. Barring an unforeseen event, expect a much less volatile year with incremental performance growth over last year.
One COVID-induced change that has altered the way people travel is remote work. According to Hotel Investment Today, Marriott’s Chief Development Officer Dana Jacobsohn said at ALIS that remote work “has completely influenced the customer and therefore changed the hospitality industry.”
“Consumers are changing and focused more on long stays. As the customer is so focused on long-term stays, more space, kitchens… Marriott now has the tools and the expertise to grow in that space,” she said.
Hotel News Now editors picked up on the theme of normalization, and News Editor Sean McCracken wrote that “things are different than they were before the COVID-19 pandemic, and they will remain different. That’s the new normal. But if the environment is more stable than it has been in recent years, that predictability makes it easier to plan, which obviously is a benefit for the industry.”
Predictability will be a key theme in 2024 as more hoteliers rely on modern business intelligence applications that help sort through information overload to build accurate forecasts and identify emerging demand drivers.
Lodging Magazine’s ALIS coverage featured some standout quotes from hoteliers on the topic of normalization in the year ahead.
Bill Hornbuckle, CEO & President, MGM Resorts International, said, “Leisure demand is at an all-time high and it continues into this year.” However, Geoff Freeman, CEO of the U.S. Travel Association, countered that “leisure travel is still moderating” and that business travel and international inbound travel to the U.S. are both “struggling to get back to pre-pandemic levels.”
Perhaps Peter Kern, CEO of Expedia Group, said it best: “We’re still working our way to what the new normal is.”
“What we observed is there were a lot of people who didn’t travel or weren’t comfortable traveling internationally in ‘22 that could finally go. So everyone went back to Europe. If you were in Europe last summer you know it was all Americans everywhere all the time. I think that will normalize. That’s why you may have seen the dip in the U.S. and it wasn’t countered by Asian travelers and others, many of whom still couldn’t come to the U.S.,” he said.
Hotel Industry Challenges to Overcome
Despite a steady stream of demand and continued pricing power, there are challenges to navigate nonetheless.
Labor continues to be a hurdle for hotel companies, writes Hotel News Now’s Bryan Wroten. “Not just because it costs more than it used to, but because it’s still hard to attract and retain top talent. Hotel companies can’t provide great service without great employees, and while many recognize the need to show employees how much they are valued through increased wages, it’s another rising cost on top of rising costs,” he wrote.
And Hotel Management picked up on the ongoing debate over the control of room inventory and hoteliers’ ability to drive business direct.
Expedia’s Kern described the status of the hotel-OTA relationship today:
“We’ve done a lot of work to really change what our role is—how we buy technology, and even how we try and find solutions to industry-wide problems like wholesale rate issues,” he said. “We believe in bringing a new sample of customers to a hotel chain resort. And that gives all of you as owners, of all industries, a chance to retain the customer. We feel like we do a really good job of bringing customers into the pool.”
Stay up to date on hotel industry trends by subscribing to the MDO blog.