Property-level streamlining — embraced by owners and ultimately by guests — is likely to continue even when travel rebounds substantially. That was but one of the takeaways from Tuesday’s “CEOs’ Think Tank” panel at the virtual NYU International Hospitality Industry Investment Conference.
CEOs Geoff Ballotti (Wyndham Hotels & Resorts), Jim Alderman (Americas CEO, Radisson Hotel Group) and Patrick Pacious (Rockville, Maryland-based Choice International), led by moderator Rick Ross (Dentons) agreed that eliminating items like in-room coffee, hot breakfasts and daily housekeeping was a necessary step to cap costs as occupancies remain depressed.
“I think franchisees have been pretty happy with all the flexibility that the brands have provided,” Ballotti said. “I was surprised at how quickly consumers adapted,” he added.
Going forward, hotels will need likely reevaluate what matters to guests. “Should we go back (to pre-pandemic standards) or look at the changes and realize this is a better guest experience and maybe a more profitable hotel?” Pacious observed.
Another potential long-term impact of the pandemic: remote work. Ballotti praised Parsippany, New Jersey-based Wyndham’s senior corporate team for its productive segue into telecommuting. “I don’t think any of us thought when we closed our offices that we would be as efficient as we’ve become,” he said.
Alderman suggested the option to work remotely might end up as a selling point for future staff recruiting efforts.
“You don’t have to be in Parsippany or Minnesota,” he said. “It changes everything in terms of how/where we work and allows us to be a global corporate recruiter.” He also estimated that Minnetonka, Minnesota-based Radisson’s corporate office space might be halved as more staff opt to telecommute.
The need to rely on virtual meetings, while not ideal, has had an upside: It’s made connecting with large audiences more efficient. “When we have a virtual town hall, 500 people show up. The communication has been incredible,” Alderman said. Pacious agreed. “I think this Zoom world is very interesting,” he said. “It’s creating a lot of efficiency… When I’m appearing virtually, I’m able to see more people… It’s allowed us to be more connected.”
Despite that, the panelists acknowledged the importance of group business rebounding for many hotels. Alderman said he expects corporate CFOs to scrutinize the need for non-essential business travel, at least for the next few years. He pointed to Amazon’s report that it had saved U.S.$1 billion in travel expenses this year as a sign of how demand has been decimated. But he added that many deals — franchise sales, for instance — are unlikely to happen without face-to-face meetings.
“The pent-up demand is incredible right now,” Alderman noted.
Pacious agreed that businesses will be slow to send people on the road again, if only because they have invested in technology to replace in-person meetings. But he added that small group gatherings and hybrid events are on the rise. “They are easier to manage,” he said.
US elections
The leaders also weighed in on the impact of the recent U.S. election and the stalled negotiations over any economic stimulus.
Democratic Party challenger Joe Biden capturing the presidency, while the Senate (for now) remains under Republican control, is “the best of all outcomes, assuming the split government will force the two parties to work together,” Ballotti said.
High on the priority list of all three, not unexpectedly, is another round of PPP funding to help business owners weather the extended economic downturn. “It’s important that something get done before the end of the year,” Ballotti said.
Pacious was more blunt.
“The stimulus has to happen now,” he said. Waiting until after the newly elected congress and president take over in January will be too late, and too many jobs will be lost in the interim, he added.