Referring to AAHOA as the “greatest American dream story,” Tyler Morse of MCR delivered a keynote during AAHOACON ’23 in which he offered plenty of business advice for association members on everything from rate strategies to dealing with disruptors.
Morse, who is CEO of MCR—one of the largest owner/operators in the U.S. lodging industry—began by imploring hoteliers to push rate. “You should raise your rates. The media is doing our job for us right now. They are telling the world about inflation. We are the willing participants in the inflationary game. We are raising rates and the customers today are not blaming us they are blaming inflation. So keep pushing those rates up,” he said.
Morse further noted that 87 percent is the “new magic number” insisting that it’s better to have a hotel run at 87 percent occupancy at $100 per night than 97 percent occupancy at $90 per night. In fact, he noted, “when we run 100 percent occupancy I’m upset because we left rate on the table.”
Morse elaborated on additional rate opportunities, such as parking for example. “Parking is a terrific business, we should all be charging for parking. Parking is not free so let’s not let it be free. It is just as good as room rates and, in fact, it is 100 percent margin business,” he said.
Morse went on to ask the attendees if they were paying too much in OTA (online travel agent) commissions and detailed how sites such as booking.com can cut into profitability. For just that reason, he noted the company is removing many of its hotels from the OTAs.
Morse further noted the brands need to take the lead in the fight against these sites and what they charge hoteliers. “It’s hard for us to fight the OTA’s on an asset-by-asset basis so I’m always encouraging the brands to take a harder line with the OTAs. The latest contracts were pretty good, but we have a bunch of hotels that are not on the OTAs. You know much money we save? Twenty-percent of a lot is a lot, 15% of a lot is a lot,” he said.
Finally, Morse referred to “fake grass” as one of the industry’s greatest innovations. “I encourage you to get involved with synthetic turf. It’s a better product and you can stop wasting money,” he said, adding it has advantages also from an aesthetic standpoint and is better for the planet as well.
