As headlines broke about President Obama’s plans to sign an executive order to increase the minimum wage for federal contractors, Nancy Johnson, Carlson Rezidor’s executive vice president of midscale development for the Americas, explained that wage issues are going to be a major concern for hoteliers in the year ahead. “If we have something to fear in President Obama’s last three years in office, it is that executive rule and what he does with that pen,” she said.
The wage issue climbed to the forefront of AH&LA’s 2014 agenda. “We will be looking at ways to beat back the hotel-only, $15-an-hour-plus living wage initiatives,” said Katherine Lugar, president and CEO of AH&LA. “They’re job killers. They hurt the people who need those entry-level opportunities that lead to advanced growth.”
Jim Abrahamson, CEO of Interstate Hotels and Resorts, said that the employee mandate for enrollment and the employer mandate of the ACA set to hit next year present ongoing challenges for his business, which employs more than 26,000 people. “People need health care. We want people to have health care,” he said. “We’re expecting a big surge in enrollment due to a lack of options in the exchanges. That creates a whole host of problems.”
Industry executives also turned their attention to the increased need for immigration reform and tourism promotion. In a short presentation during the conference’s opening session, Hilton Worldwide CEO Chris Nassetta demonstrated that attracting foreign travelers to the United States is one of the fastest ways to boost the economy and create jobs. Nassetta—who said that the United States has lost one-third of its market share of international travelers over the last 12 years—touted electronic visas, the JOLT Act, and welcoming countries such as Brazil, Croatia, Poland, and Argentina into the visa-waiver program, as big priorities for the industry. “Travel and tourism is the world’s biggest industry. It makes up 9 percent of global GDP and represents over 260 million jobs globally,” he said. “We are in a time of untapped potential.”
Attracting Millennial Travelers
The younger generation continues to weigh on the minds of hotel decision makers, as they look for ways to attract and retain this growing demographic. Appealing to millennial travelers was a topic brought up in nearly every conference discussion—from a presentation made by Marriott CEO Arne Sorenson to a brand leadership panel that included Best Western CEO David Kong and Kimpton CEO Mike Depatie.
“This group is going to be half the travel dollars by 2020,” said Deloitte’s Steve Jennings. “Understanding how they’re going to stay in hotels, how they are going to relate to hotels, and the experiences they want is going to be the name of the game.”
Research shows that millennials search for and book hotels on mobile devices, look for personalized, local experiences, and are likely to tack on leisure activities to business trips. Implementing the right technologies and reaching out through social media channels have become key ways for brands to capitalize on this important group of consumers.
But David Kong cautioned that as hoteliers adjust their services and products to meet the potentially fickle needs and wants of millennial travelers, they run the risk of alienating loyal, long-term customers. “Millennials are aging and having kids. Their needs and wants are changing,” he said. “Whatever changes you implement, there has to be a return on investment. For us—a company that caters to a wide variety of customer segments—we have to be aware of what the majority wants.”
Photo Credit: Rebecca Shapiro