Hotel CEOs talk about future
The hotel industry is thriving once again as more Americans hit the road for business and for pleasure. But today’s travelers are ever-more demanding and tech-savvy, and they’re expecting hotels to adapt.
USA TODAY assembled five of the industry’s top executives last month at the Americas Lodging Investment Summit in Los Angeles in the L.A. Live JW Marriott hotel for a discussion of the industry’s latest developments and challenges. Participating in our third annual roundtable were: Marriott International CEO?Arne Sorenson; Kimpton Hotels & Restaurants CEO?Michael A. Depatie; Choice Hotels International CEO?Stephen Joyce; InterContinental Hotels Group President of the Americas?Kirk Kinsell; and Best Western CEO?David Kong. USA TODAY’s?Nancy Trejos?moderated the discussion. The text has been edited for clarity and length.
Q: The hotel industry is rebounding from the recession. Average daily rates are up, occupancy levels are up. This is good for you. How is this good for the guest?
Marriott’s Sorenson:?What the guest really gets is the ability to travel, which they love to do. And the guest gets choice. Choice is very important ? choice in terms of where they stay. The capability is there for hotel companies to continue to develop and grow in their product. And the guest continues to be demanding, which they should, and wants to have things like technology and advanced opportunities to use the tools that they have at home in the hotel room. We in the hotel business are able to deliver that.
Q: And they want free Wi-Fi. But a lot of hotels, especially upscale facilities, charge for Wi-Fi. We’re seeing some hotels start to reverse that trend, such as IHG providing free Internet to Rewards Club members. Will others follow their lead?
IHG’s Kinsell:?What we believe in first and foremost is listening to your guest, listening to potential customers. The biggest complaint was availability of Wi-Fi and the cost of Wi-Fi, and we wanted to solve that. We’ve offered free Wi-Fi for all of our loyal customers throughout the IHG Rewards Club. The challenge to delivering that, though, is you’re working through an infrastructure. There is invested cost that needed to be consumed. There was also just finding solutions that would work, and we had to work through those to make sure that we could deliver on our promises.
Choice’s Joyce:?You have a large expansion in the number of people traveling, but they have not forgotten their 401(k)s, and their houses shrunk enormously in value. You still have this continuing value orientation, whether it’s at the luxury end or whether it’s at the budget end, for “What am I getting for what I’m paying?” That is more prevalent than I think I’ve ever seen in the business. And I don’t think it’s even a midterm phenomenon. I think it’s long-term. The consumer is resisting price.
Kimpton’s Depatie:?You can get free Wi-Fi at your local Starbucks or burger joint, so I think you’d expect it at your hotel. We offer free Wi-Fi for all our Kimpton loyalty members. What’s interesting about the business is lower-priced hotels have been giving Wi-Fi away for a while, but higher-priced hotels have been charging for it. Why, I don’t know, but I think it’s going away.
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