It was time for the hotel industry’s midyear check-up as the most powerful lodging industry leaders headed to New York for the annual NYU Hospitality Investment Conference. This event focuses mostly on the financial side of the business, so for two days, the NY Marriott Marquis became the epicenter of the hotel universe. If you want to get deals done this was the place to be.
It seems the predominant thought on the collective mind of attendees is how to save, save, save. Though the industry is still delivering outsized performance, smart hoteliers are already thinking about an eventual industry downturn. Not in a “Hey, let’s panic” sort of way. It was more about being smart and preparing for the future.
That’s why these folks are starting to think about how to save like a boss, and why many more realize it’s critical to find smarter, less expensive ways to renovate their hotels that also create memorable guest experiences.
Here are our top reasons shared at the NYU Hospitality Investment Conference why hoteliers are starting to think about lowering their expenses.
Zika
Irrational panic about this mosquito born virus is starting to bite into traveler’s desire to get out and explore new places. While we think most concerns are misplaced, the reality is if more people panic it could start to hurt industry profitability. Remember the Bird Flu and H1N1? They made headlines and hurt the travel economy though both were essentially imagined threats.
Isolationism
One of the ways hotels have been able to stay full and profitable is by a record number of overseas visitors coming here to spend their money. And lots of it, too. International visitors typically stay longer and spend more money per day. But with the current political climate and chatter about building walls and curtailing visa waiver programs, your hotel may suffer because of political shenanigans.
“Travel is a perception driven business. If they think it will be a hassle, they simply won’t make the trip,” said Co-Chairman of the Board and Office of the President, Loews Corporation, Chairman Loews Hotels & Resorts. “The rise of political turbulence and political rhetoric is creating the misguided idea the fortress America is one the rise. Pulling back from the rest of the world is simply not an option.”
Slowing Growth
The hotel business is enjoying its longest stretch in recorded history of increased profitability. Meaning, more money is being earned by hotels now over the previous month, on average, for the last six years.
However, rate of revenue per available room (RevPAR) growth is slowing. That’s a clear signal it’s time to figure out ways to cut back on expenses where possible. Whether it’s renegotiating vendor contracts, realigning corporate structure, or refinishing or re-engineering furniture rather than needlessly buying new pieces.
Disruption
The nerve-inducing Airbnb is still driving hoteliers nuts as they try to figure out the true impact of this encroaching disruptor.
“People are willing to accept non-traditional lodging stays more than ever. Their needs have gone beyond the typical housing product, why let them go somewhere else?” said Steve Joyce, President & CEO of Choice Hotels International.
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For more information on The Refinishing Touch and how we help hotel owners, developers and designers reimagine spaces by reinventing their furnishings, contact us online, call (800) 523-9448, or email us at [email protected].