SAN DIEGO—Robotics, consolidation and personalization will improve hotel service, help with customer-relationship management and allow for targeted segmentation toward each cohort of hotel guest, RAR Hospitality's CEO Bob Rauch tells GlobeSt.com. We spoke with Rauch, a 40-year veteran in the hotel industry, about how he would sum up the sector in 2017, what 2018 looks like and the top hotel trends he's noticing.
GlobeSt.com: What would you say were the “good, the bad and the ugly” with regard to the hotel industry in 2017?
Rauch: The good is that revenues continue to grow, especially via rate. The bad is that costs are creeping up at a rate that is higher than revenues, likely dropping net incomes in markets impacted by significant increases in labor costs like California and New York. There is nothing ugly about hotel performance in 2017, but the natural disasters and Las Vegas shooting were shocking.
GlobeSt.com: What's the outlook for this sector in 2018?
Rauch: Twenty-eighteen should perform well, with supply outpacing demand ever so slightly (2.1% to 1.9%, respectively, according to STR) and average rates continuing to grow at 2.5%. RevPAR growth will be about 2.3%.
GlobeSt.com: What are the top hotel trends you're noticing?
Rauch: Trends include robotics, consolidation and personalization. Robots will be used for increasing productivity; brands, management companies and online travel agencies (OTAs) will merge to have more clout in negotiations for customer acquisition and cybersecurity, and the guests will receive better service on pre-arrival, digital key and other technology services and customer relationship management. This will be done with targeted segmentation toward matures, Baby Boomers, Millennials and the rapidly growing Chinese travel market.
GlobeSt.com: What can hotel guests expect to see changing over the next couple of years?
Rauch: Hotel guests will see more brands, but less companies due to mergers—soft brands that target owners who want to stay with a winning brand but have the main brand taken (think Marriott and Marriott Autograph or Hilton and Canopy by Hilton), and almost all hotels will be new or renovated.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
