NEW YORK CITY—Making more of their outside-the-box statements, hotel executives at the 37th annual NYU International Hospitality Industry Investment Conference—held in Midtown last week—made clear that they have different real estate strategies and varying views on future demand generators.
On the topic of whether to deploy an asset light or heavy approach, Hyatt Hotels Corp. president and CEO Mark Hoplamazian said, “There aren't big scale benefits in this industry; it's not necessary to survive.Several of the branded companies don't represent an asset light approach so there isn't one flavor to the industry. We gained key presence in markets through deployment capital.”
But Sebastien Bazin, chairman and CEO, Accor took a different tack. “We've been asset heavy because if you can demonstrate you're a good asset allocator and manager and arbitraging those properties you want to keep, then the market will let you do it.”
Meanwhile, Hilton Worldwide president and CEO Christopher Nassetta took a more holistic approach. “Our real estate portfolio is 37% of our properties; it's all about maximization of value for shareholders. We're agnostic as far as what's best. The way we're ultimately going to do it is to make sure each segment of the business is maximizing unit growth. All options are on the table in terms of how do we maximize value.”
Various brands, and companies, also hold different views on what markets are ripe for investment. There's an assumption that, as Cuba opens up to American visitors, tourists will head to the country in droves. However, when choosing among global destinations, some hoteliers have their sights set elsewhere.
“Cuba is a small market,” explained Bazin. “The population is 11 million but there are just three million visitors. It doesn't have the same growth potential as China.”
“The number of travelers from China is expanding because it's becoming easier to get visas there,” he added. “So what we have to do is make Europe and the US more attractive by increasing brand awareness.”
Hoplamazian added, “Meetings, incentives, convention and exhibition business is growing the Middle East, India and its continuing to drive China too.”
Across global locations, select service seems to be the apple of the industry's eye, noted Nassetta. “What's most striking is that if you look at mega trends, limited service is quite pervasive around the world; it's where there is the greatest demand. Latin America and Asia pacific are rapidly evolving that way—the Middle East not as much but it's getting there.”
Several hoteliers also questioned whether that much feared—and often emphasized—traveler, the millennial, needs to be handled so differently from other generations.
“Millennials are misunderstood,” declared hotel consultant William Ferguson, chairman and CEO, Ferguson Partners. “They're hard working and curious, more interested in the business holistically and mentoring is a key component to retain them—they want someone at the company who cares about them and can share real life experiences. This is a group that does want to make a difference but you have to engage them.”
Added David Kong, president and CEO, Best Western International, “The millennial generation is not homogenous,” noting that some have been in the work force for some time and are traveling with young families while others are just starting out. “Look more at what today's travelers want.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
