Why Hospitality Is the Best Place To Work, Invest & Innovate
The euphoria was obvious at last month’s 2022 NYU Hospitality Investment Conference in New York, and it was backed up with data that revealed a bright year ahead.
Investors, operators, brands, and bankers discussed why hospitality is the best place to work, invest, and innovate now, as well as how to capitalize on the opportunities ahead.
“We have a massive demand for hotel rooms today, and we’re not even at half of the business and international travel we had pre-pandemic yet. That’s coming soon.”-IHG Americas CEO Elie Maalouf
Best Place To Work:
The job market continues to be abundant in opportunities, and the hospitality business is growing to become a more appealing career option than ever before.
The Boston Consulting Group unveiled additional data on the top main reasons why people might not want to work in hospitality. Scheduling flexibility was towards the top of the list, and hotel groups like Aimbridge are now developing solutions to address this, using their size to enable flexible scheduling in cities like Houston, where the firm controls 65+ hotels.
Historically, anyone regardless of background could build a strong career in hospitality. Like Kevin Jacobs was the first member of his family to attend college and began his career as an hourly hotel worker. He is now the CFO of Hilton Hotels. “The opportunities are immense,” he added.
The potential is not limited to individuals who work in hotels. Boom times are also anticipated for people working at hospitality brands or firms that provide services to hotels.
Not all businesses were equally affected by the pandemic, with entertainment, banking, and technology companies seeing record growth. “Hospitality now has tailwinds,” Maaloof explained. “Even if we face a prolonged recession, I expect hospitality to do well.”
This is why the hotel industry is not just the finest place to work, but also a terrific place to invest.
Best Place To Invest:
Why hospitality is the best place to invest, shouldn’t we worry about the recession or what the hotels have gone through pandemic… here the leaders in hospitality have projected the future of hotel success. here are a few statements from the conference.
“Many investors in office, retail, and other sorts of commercial real estate are having challenging conversations right now, but the prognosis for hotels is much clearer”, said Blackstone’s Head of Strategic Investment. There are extremely strong technical and demographic trends that demonstrate the short-term and long-term possibilities in hospitality.
STR President Amanda Hite highlighted data indicating sustained growth in the coming years. “We do not expect the forthcoming recession to have the same impact on the hotel and tourism business as previous recessions.”
Lonny Henry, Global Chairman of Investment Banking at JP Morgan, said group segments, business travel, and international travel are just starting to come online.
“Most travelers haven’t begun to travel again, there’s still a lot of untapped demand out there,” said Jeffrey Horwitz, Proskaur.
Revenue technology is helping hoteliers benefit from that demand. “We have tools today that we never had before,” said Noble Investment Group CEO Mit Shah. “We can push rates – and drive earnings.” Wyndham CEO Geoff Ballotti agreed, saying they are seeing higher profitability in their HotStats data than pre-pandemic.
“In a recession, there’s no better place to be than in hospitality,” said hotel financier Michael Lipson.
Finally, we are starting to see efforts toward diversifying the hotel investment ecosystem. Marriott announced a $50 million hotel development program to help provide underrepresented groups with more access to investment opportunities that have unfortunately been limited historically.
Best Place To Innovate
Today’s technological prospects were a constant topic in statements made by owners, brands, and operators. Here are some statements made by the leaders which are why we think hotels are now the best place if we innovate.
“Previously, technology was exclusively judged by how well it served the visitor,” said Virgin Hotels CMO Doug Carrillo. “Now it needs to be evaluated in how it serves hotel staff and the owners.”
Wyndham CFO Michele Allen discussed the company’s move from on-premise to cloud-based technologies. Accor is following suit. “By 2025, we’ll have moved everything to the cloud to move quicker and be more adaptable,” said CFO Jean-Jacques Morin.
Other anticipated benefits include increased productivity and cost reductions, security, and future-proofing their technology stacks through increased connection.
Larry Cuculic, CEO of Best Western Hotels, asked the audience why Elon Musk wants to acquire Twitter since he already runs numerous businesses. “It’s all about the data.”
He claims that the same is true for hotels. In hospitality, there is a greater possibility than ever before to gather guest preferences ethically and securely to deliver better service while increasing revenue and profitability.
“A lot of what we deliver to our guests we couldn’t do without our technology partners,” said Carrillo. Morin agreed that the opportunities ahead will require partnership. “There is more we want to do with technology than we can do ourselves.”
“When owners invest in renovating their properties they’re seeing a disproportionate return on that investment right now,” said Marriott’s CFO Lenny Oberg. Allen at Wyndham agreed: “Owners that are focused on the guest experience and are adding value are the ones who will come out of this winning.”
Kevin Jacobs, CFO, Hilton Hotels, “Taking advantage of the opportunity ahead is going to require smart operations and capital allocation, but those who do this will be in a strong position to significantly outperform not only others in the hospitality industry but those in other industries as well”.