Laura Lee Blake was named president/CEO of AAHOA earlier this year.

Empowering Women

A pair of major lodging industry associations, AAHOA (Asian-American Hotel Owners Association) and AH&LA (American Hotel & Lodging Association, continue to work on behalf of women introducing programs this summer aimed at both elevating and protecting them, respectively.

AAHOA, the nation’s largest hotel owners association, with nearly 20,000 members who own 60% of the hotels in the United States, announced the launch of ElevateHER, an initiative aimed at elevating, educating, and empowering the women hoteliers of AAHOA and across the industry.

“AAHOA has been proud to celebrate the important work women are doing at every level of hospitality, and this initiative further underscores our commitment to the women of AAHOA and elevating their contributions to the industry,” said AAHOA President & CEO Laura Lee Blake. “While there’s still much work to be done, AAHOA recognizes the significant strides women have made to be seen at industry events, heard in the boardroom, and valued in the workplace – ElevateHER celebrates these accomplishments and will further drive our association’s work around elevating and supporting women in the industry.”

In what has been a predominantly male-dominated industry, AAHOA understands how important it is to foster, promote, and empower women entrepreneurs – and the impact that ElevateHER can have to help women shatter the glass ceiling and pursue their own entrepreneurial journey.

“Women play an active role in all areas of hospitality – from welcoming guests at the front desk to providing the best in housekeeping services to owning and operating hotel properties, women hoteliers continue to step up to leave their mark in the industry,” said AAHOA Female Director Eastern Division Lina Patel, CHO. “I’m proud to work alongside the entire AAHOA Team to launch the ElevateHER program and give women hoteliers the chance to learn from and inspire each other, and set everyone up for years of progress and success.”

AAHOA’s ElevateHER program will offer networking and educational opportunities for women hoteliers and hospitality industry professionals, and elevate AAHOA to be the foremost resource and advocate for women in the industry. This initiative will ultimately support all women in their endeavors and ensure more stability and opportunities for generations to come.

As part of our initial launch of this initiative, AAHOA is hosting a Women Hoteliers ElevateHER Conference, October 26-27, 2022, in Cincinnati, OH, which will focus on bringing together AAHOA’s engaged community of women hoteliers for education, inspiration, and empowerment.

Meanwhile, late last month honor of World Day Against Trafficking in Persons, the American Hotel & Lodging Foundation (AHLA Foundation), ECPAT-USA and Marriott International launched a trafficking prevention training program for the hotel industry, titled “Recognize and Respond: Addressing Human Trafficking In The Hospitality Industry.”

This new training program was developed by Marriott in collaboration with non-profit organizations and survivor experts. The program was donated by Marriott to ECPAT-USA and is now free and available to the hotel industry through ECPAT-USA’s online learning platform thanks to the support of the AHLA Foundation.

Building on the foundation of the “Your Role in Preventing Trafficking” training, released to the industry in 2020, this new training features unique learning paths for associates and managers around increased guidance on responding to potential trafficking situations and interacting with potential victims.

Furthering training and education to raise awareness about human trafficking is a main goal of No Room for Trafficking, an AHLA Foundation national awareness program that builds on the industry’s ongoing commitment to unite the hotel and lodging industry in thought leadership and action to drive forward the next phase of anti-trafficking efforts.

With the launch of this new training, “Recognize and Respond: Addressing Human Trafficking in the Hospitality Industry,” the AHLA Foundation has launched a challenge to all industry members to extend their training efforts to include this program and help bring the industry one step closer to ending human trafficking.

 

Change At The Top

A pair of hotel management companies, OTO Development and Twin Bridges Hospitality, tapped new leaders yesterday to help bring their respective companies to the next level in terms of growth.

Todd Turner has been named CEO of Spartanburg, SC-based OTO Development, taking over the role from fellow co-founder Corry Oakes, who passed away unexpectedly on August 7. Oakes and Turner, along with Jim Ovenden, founded their namesake hotel development and hospitality management company in May 2004 alongside George Dean Johnson Jr. and the late H. Wayne Huizenga.

“Corry and Todd worked side by side for 18 years to take OTO Development from an idea into a premier lodging company,” says Geordy Johnson, President of The Johnson Group. “Todd is a seasoned, inspiring leader who will carry their shared vision forward.”

Turner previously served as VP/Real Estate at OTO Development, which is part of The Johnson Group. He began his career developing real estate at WJB Blockbuster Video and then held positions of increasing responsibility at Extended Stay America.

As VP/Real Estate at the NYSE-listed company, he helped turn ESA into the fastest-growing owner-operated hotel chain in lodging history prior to its sale to Blackstone, according to the company.

“I will forever mourn the loss of my dear friend Corry. I have had the tremendous honor and privilege of working alongside the finest man and greatest leader I know,” Turner says. “OTO’s experienced leadership team embodies a culture that reflects Corry’s incredible qualities, and we are well-positioned to carry forward the legacy he set in motion.”

Meanwhile, Jillian Katcher has been named President of Newport, CA-based Twin Bridges Hospitality.

Katcher comes to Twin Bridges Hospitality from her most recent post as Co-Head of Hospitality Investments at Cascade Asset Management Co., the investment office for the Gates family and the Bill & Melinda Gates Foundation Trust. She held this position since 2019, where she focused on managing the firm’s interest in Four Seasons Hotels & Resorts.

Katcher began her career in management consulting. When a project for Starwood Hotels revealed her passion for hospitality, she pursued a unique journey where she garnered experience from housekeeping to headquarters, according to the company. After working with Marriott International to launch an on-property operations immersion for MBAs, she transitioned to the company’s HQ where she held various leadership roles in food and beverage strategy, consumer insights, and global brand and marketing. ​

According to Twin Bridges Hospitality, in her new role as President, Katcher will focus on taking the organization to its next level of growth while maintaining the company’s unique asset management style.

“It’s an exciting time to be in hospitality,” said Katcher. “Travelers are back in full force, seeking discovery, meaning and connection, and the Twin Bridges portfolio of hotels redefines the bar for select service. I’m honored to have the opportunity to help grow this business and build on its differentiating focus of inspired asset stewardship.”

String Of Acquisitions

While the hotel acquisition market has cooled a bit in recent months, there has been an uptick in activity within the past two weeks led by an international alliance that will bring 15 hotels to Wyndham’s Registry Collection.

Wyndham Hotels & Resorts and Palladium Hotel Group, one of the largest Spanish hotel companies, announced a commercial alliance that will add more than 6,800 rooms to Wyndham’s Registry Collection. The 14 all-inclusive TRS Hotels and Grand Palladium Hotels & Resorts managed by Palladium Hotel Group are located in Mexico, Dominican Republic, Jamaica, and Brazil and will join Wyndham’s portfolio under a long-term agreement leveraging Wyndham’s distribution and bringing Wyndham’s all-inclusive resort portfolio to 26 hotels.

“Expanding Registry Collection Hotels continues Wyndham’s global growth in the luxury space and grants more travelers access to new, preeminent experiences in some of the most remarkable destinations,” said Geoffrey A. Ballotti, president and CEO of Wyndham Hotels & Resorts, in a statement. “These unique, all-inclusive hotels are designed to ensure that guests—whether redeeming Wyndham Rewards points or booking directly—will enjoy an elevated vacation.”

Meanwhile, NewcrestImage has entered a definitive agreement with a joint venture between Highgate and Cerberus to acquire four LaQuinta-branded properties which together total 696 rooms.  The properties include the LaQuinta Inn & Suites at Los Angeles International Airport (LAX) that marks NewcrestImage’s first gateway location in California.

Closing took place on one hotel—the LaQuinta Inn & Suites Irving DFW North, located two miles from DFW International Airport—while closing is expected in August for the other three hotels: LaQuinta Inn & Suites Anaheim; LaQuinta Inn Phoenix North; and LaQuinta Inn & Suites LAX.

“These properties are uniquely-positioned in strategic destination locations, making them very appealing as we structure a strong investment-based portfolio,” said Mehul Patel, Managing Partner & CEO of NewcrestImage, in a statement.

The company also in late June acquired the 175-room Cambria Hotel in Southlake, TX, located six miles from DFW International Airport and five miles from the Gaylord Texan Convention Center.

Equinox Hospitality, a hotel investment and management firm has acquired four properties in Texas from Sonesta International Hotels Corporation. Equinox Hotel Management, a subsidiary of Equinox Hospitality, operates the properties.

“Our growth strategy is to source and execute top-quality deals in high-growth markets and with top-tier joint venture partners that share the same values as us,” stated Adam Suleman, principal and executive vice president of Equinox Hospitality. “This approach should keep us on a track to grow our portfolio with strong performing assets while continuing to build on our longstanding industry reputation and legacy as a family-owned business. Acquisitions such as this one are perfect examples of our strategy in action.”

Totaling 463 keys, the four properties — Sonesta ES Suites Dallas Richardson, Sonesta Select Dallas Richardson, Sonesta Simply Suites Dallas Richardson, and Sonesta Simply Suites Fort Worth Fossil Creek — are located in the Dallas-Fort Worth metroplex.

 

Four Macro Factors That May Erode Midscale Hotels

The travel recovery this summer is at full throttle, but to keep the gravy train going hotels have to look not only at what the post-pandemic guest wants, but also the customer two years, five years and a decade from now. How will our industry evolve? Having a good picture of this can inform CapEx investments, branding vision and any tech implementations to support those other two.

Per the title, our thought is that travel will evolve at the extremes of the spectrum as global changes increase the needs for economy and limited-service accommodations, as well as upper upscale and luxury properties, but at the expense of the middle categories. It’s not an extinction, though, but a thinning out of midscale and upscale demand, resembling a barbell distribution. Here’s our short list for what may cause this.

  1. Erosion of the middle class. The pandemic money printing has caused the rich to get richer and the poor—those without non-cash equities or other assets—to slowly drown from the costs of inflation. With wealth comes increased demand for high-end discretionary expenses like luxury hotels that are quite price inelastic, while relative impoverishment leads to travelers seeking no-frills accommodations and rate sensitivity down to within five dollars. In the arms race to serve these two divergent cohorts, the middle-of-the-road hotel brand becomes the master of none.
  2. Stagnation of business travel. Yes, it’s returning post-pandemic as every good salesperson knows that deals are best done in-person. Still, the conveniences and cost savings of videoconferencing are too great for companies to ignore. As such, expect curtailed corporate travel budgets to be the norm once we’ve gotten all the pent-up demand for meetings and events out of our systems. And because this segment was a major contributor to the health of upscale or four-star hotels around the middle of the distribution, it’s natural to assume that as this revenue silo diminishes these properties will pivot in search of new customers.
  3. Technology driving the extremes. Automation capabilities now allow hotels to do more with less to the point where basic services can be satisfied with minimal staffing requirements—critical during ongoing labor shortages and the demand for better margins from owners. This will nudge organizations towards the select service camp. At the other end, the continuous arms race for luxury and ultraluxury is forcing upscale hotels to look to advanced, tech-driven wellness program upgrades as a means of giving guests an ongoing reason to choose their brand over others. But all this medical tourism and longevity tech doesn’t come cheap, which means it’s only accessible to those brands that are able to charge an arm (with a nice watch attached to it!) and a leg for the experience.
  4. Positive feedback loops from investors. Where focus goes, money flows. With the abovementioned three forces shifting the ground into this barbell distribution, savvy investors will look to meet the market by further promoting this digression. This will happen through such processes as reflagging followed by a renovation to the new brand standards or investing in emerging, popular hotel brands that are more attuned to these new guest demands.

While this scenario may not hold true for your market and, of course, there are exceptions, the one fact throughout is that the world of hotels will continue to be exciting for the foreseeable future! Hope you’re making the most of this great summer of travel!

Leading The Way

Based on system-wide results that outpaced the overall industry, as well as positive growth projections for hospitality in the months ahead, Choice Hotels International, Inc. hosted its annual conference with a theme of “Go” and provided plenty of reasons for optimism to its roughly 5,000 franchisees on hand.

The company’s 66th annual convention took place earlier this month at Mandalay Bay in Las Vegas. Patrick Pacious, President and CEO, Choice Hotels, touted the company’s recovery efforts in the wake of the pandemic and its outlook for the future to its franchise partners.

“Not all hotel companies weathered the storm quite as well as we did, but because of our history together, some smart financial decisions and an unyielding commitment to your success, Choice Hotels was able to continue to invest in our owners and in our brands at a time when you needed it most. In short, when other hotel companies said ‘stop’ Choice said ‘go,’” he said.

Pacious added, “we’ve emerged through this time of uncertainty as one of the best positioned hospitality companies and franchise systems in the world.”

The CEO further noted that in 2021 Choice generated a 2.5 percent RevPAR increase system-wide over 2019 levels. In addition, in the fourth quarter of 2021 RevPAR was up some 14 percent over 2019 and the company outperformed the overall industry by a combined 19 percent for the year.

“We’re poised for the future and we did it together so now is the time for us to build on that lead. Now is the time for us to “Go” because things are looking up and people are ready to travel again,” said Pacious, who referenced a recent study that revealed that 9 out of 10 Americans say they are ready to travel in 2022.

Pacious also underscored the company’s ongoing efforts to reduce operating expenses for owners and increase profitability. As an example, implementing housekeeping by request has resulted in substantial savings.

“We’ve identified over a dozen different ways for the average hotel to lower operating costs by nearly 15% since we began this initiative back in 2020 and we aren’t finished with trying to improve franchisees’ bottom line. We’re aiming to get to a full 20% in average cost savings by 2023,” he said.

“One franchisee said to me ‘I’ve never been to a convention where the focus was lowering costs for the owner,’” said David Pepper, chief development officer, during a media roundtable.

Meanwhile, the executives touted the attendance at the event and the company’s long-standing franchisee relationships.

“To see more owners here than we saw in 2019 really says a lot,” said Pepper.

“We’ve been connected virtually for the last two years and it’s fantastic to be back in front of them [franchisees],” said Pacious.

The CEO further detailed how the company outpaced the industry in terms of results.

“Nobody advertised in the summer of 2020, except for Choice Hotels. We were on TV with our “On The Road Again” campaign and that drove a lot of business to our hotels. We built on that with some pretty interesting technology that allowed us to see what was happening logistically across the country and take that information and drive the right promos; for length of stay where that made sense, for discounting where that made sense. The sophistication we’ve got around our merchandising capabilities really accelerated during the pandemic so that drove a lot of business travel in the industry verticals that we serve,” he said.

Pacious also attributed some of its success to its strong relationship with its franchisees.

“When this pandemic hit, it hit a lot of us that our friends are in trouble. Not just our business associates in the franchise world, but our friends. This company didn’t decide in March of 2020 that the franchisees were at the center of what we do. That’s been our legacy, so this was very much in our DNA,” he said.

Pacious added, “We have some really fun stories of how we took business from our competition. It’s interesting talking to these owners who own other product and they say ‘the Choice global sales people and the Choice franchise services people were there when we needed them and I didn’t get that from my other brand.’ Those are just some key examples of why we took lead and have held onto it as we moved through 2021,” he said.

Robert McDowell, chief commercial officer, Choice Hotels, reinforced the point.

“We were one of the few chains that didn’t let go of the majority of our sales teams. A lot of our competitors let go of their sales teams, while we kept them employed,” he said.

Finally, Pacious detailed the company’s recent focus on the upscale and extended-stay segments and commented on the potential for brand expansion down the line.

“We’ve done a lot of investment in brand launches in upscale and extended-stay so we have a lot on our plate to be even more successful in those two key segments. There’s one intersection there between extended-stay and upscale where we aren’t yet. With the launch of Everhome Suites [midscale extended-stay brand] and the success we’re seeing there we will want to get that to scale before we probably enter that space. But that will likely be the next opportunity for us to grow our business,” he said.

 

Travel Trending Up

U.S. Travel Association President/CEO Roger Dow insisted that hospitality is poised for a full recovery citing the historic resilience of the lodging industry, a number of ongoing travel-related initiatives, and pent-up demand as key reasons for his optimistic outlook.

Dow recently revealed during a keynote address that he will be leaving his post in July after some 17 years. Dow—who helped create the association in 2005—clearly stated the focus going forward.

“We’ve got a couple of major objectives at the U.S. Travel Association, working together with the whole industry, and that’s to bring back this thing faster and stronger than the economists are predicting and to really exceed 2019,” he said.

Dow acknowledged the past two years following the pandemic have been challenging.

“It’s been two long years and the whole mission of our organization is to increase travel to and within the United States. We had to pivot to survival, relief, and now pivot to stimulus to get things moving again,” he said.

As an example, Dow noted that Brand USA—which is tasked with marketing the U.S. as a global destination—recently received some $250 million as part of the $1.4 trillion Omnibus spending package that was passed in mid-March.

“Brand USA is funded by visitors and no one’s been visiting here for two years internationally so they would have gone broke. They’re going to be healthy for a long time to come and probably more important than ever before,” he said.

Dow conceded the lodging industry is currently facing some headwinds with regards to macroeconomic issues, such as inflation, which he noted has reached its highest level in 30 years.

“It’s also bringing with it the difficulty that so many of you have as developers of getting product and getting approvals,” he said, later adding, “the cost of the new build right now is going up.”

Rising gas prices and energy costs, which continue to be impacted by the ongoing conflict with Russia and the Ukraine, also pose a significant threat.

“We just did some research and 63% [of travelers] are saying that gas prices are going to have them changing where they go and how they go. So it’s really important for us to get Congress to understand where we’re going,” he said.

Despite some of the aforementioned headwinds and current projections, Dow referred to what he calls “coil spring” demand and the expected return of business travel, which he noted is currently at roughly 44 percent of 2019 levels.

“Economists are saying that this industry will come back in 2024, I do not believe that. I’ve looked at the numbers, I’ve seen all the bookings. The bookings from about May on are off the charts,” he said.

Dow further elaborated on some of the challenges.

“We’ve got two or three enemies when it comes to business travel. One is the corporate CFO, they are saying at their corporate table ‘the last two years we’ve had no one traveling and look at the money we’ve made. Look at our profits. Do we really need all those people traveling going to meetings?’” he said.

“Then you got the HR [human resources] department and you’ve got the general counsel chiming in and saying ‘well do we really want to push those people to be on the road? What if something happens to them, do we want it to come back on us? Let’s sort of sit back a little. So we’ve got to change those policies from a corporate standpoint, that’s really important,” he said.

Meanwhile, Dow noted that international business is currently just 22 percent of 2019 levels as he highlighted some of the association’s recent efforts to help grease the skids.

“We put a lot of pressure on the government to get people through TSA and that created TSA pre-check and then global entry and automated passport control. Together we really got the government to understand that travel and tourism is the front door to economic development,” he said.

The association also strongly urged the government to increase visa waiver programs, according to Dow, who noted when he started there were 27 visa waiver countries and that number has grown to 39. For example, after South Korea became part of the visa waiver program the number of visitors to the U.S. went from 400,000 to 850,000 in one year.

Dow also referred to the recent passing of the massive infrastructure bill by the U.S. as “critical” for the industry as it would result in things like charging stations on highways, as well as hotel properties. He expressed about “how that’s going to work out?”

The impact of COVID policies remains a chief concern as well, according to Dow. For example, he noted pre-departure testing has been eliminated by lots of countries, but not the U.S.

“That’s inhibiting travel like crazy. The United Kingdom and EU countries like Greece and Poland are all eliminating that so hopefully we’ll see that get eliminated very soon. The other thing is a timeline to get the mask mandate eliminated. I’m hopeful we’ll see some action,” he said.

Finally, Dow referred to the recessions of 9/11 and 2008 as proof of the industry’s resilience and noted ‘sometimes these economists get it wrong’ as he took a look ahead.

“I think there’s so much coil demand. We’re going to get back, public sentiment is strong. We’ve got 90% of Americans that were surveyed just last week say they plan to travel in the next six months. So America is ready to move and move for business so I see it coming back very strong and I think together we’re going to write the next chapter of this industry,” he said.