Hotel Execs Expect Healthy Year

LOS ANGELES—Hotel executives on the View from the Boardroom panel at ALIS 2015 expect a healthy year, after a very strong 2014, with increased rates and thus increased revPAR. The panel included David P. Berg, COO at Carlson Rezidor Hotel Group; James Carroll, CEO at Crestline Hotels & Resorts; Kevin Frid, president of the Americas at FRHI Hotels & Resorts; and Mitesh B. Shah, senior managing principal and CEO at Noble Investment Group. Francis J. Nardozza, chairman and CEO at REH Capital Partners, moderated the panel.

“The biggest surprise this year is that there were no surprises. We started out the year with lingering doubts about the recovery, and we got through month after month,” said Carroll on the panel. “Booking windows are shorter. We had longer stays at higher rates. Going into 2015, we are going to continue to push rates because ours owners are looking for returns.” Frid added, “This year looks fairly predictable as well. Middle East and Asia is where the growth is, and China has the most growth action in Asia. We keep trying to pull back in some way, because we aren't a big company, and say that we will just do strategic locations, but when you find new cities with 20 million people, it is hard to resist.”

This growth has many drivers. The panelists noted that group business in definitely back; however, panelists said that these groups are not booking as far in advance and they are spending money quite differently than they used to. Specifically, these groups are looking for high technology, and something as simple as bandwidth can make or break a deal. “Group business is definitely back. It is the last market to come back, but it is back and it is strong,” said Frid. “One thing I'll add is that how they spend their money has changed. They are far more concerned with optics. It is much more muted, and I don't see that changing. People aren't booking farther in advance because of the nature of business. People aren't committing that far in advance like they used.”

Strong business doesn't mean they are not without challenges. Carroll noted that the revitalized job market has made it difficult for them to find quality talent to work in the hotel properties. “The labor market has tightened, and now you need to work harder to get and keep the best talent to take care of your hotels,” he said. For that reason, it has become important to retain talent through proper wages and to develop a quality-training program for new people to come in and succeed.

The ALIS 2015 program covered a myriad of topics in the hotel industry, including an economic update and a panel on technology platforms that are changing the industry.