With this year’s NYU International Hospitality Industry Investment Conference postponed until November, a virtual event was held last week in its place with six of the most influential leaders of the hotel industry.
Led by Jonathan Tisch, chairman and CEO of Loews Hotels & Co. and honorary chairman of the advisory board of the NYU Jonathan M. Tisch Center for Hospitality, the discussion centered around CEOs sharing their thoughts on the hospitality industry in the time of COVID-19, and what’s to come in the future.
“The global scale and impact of this is greater than anything our industry has ever experienced,” Tisch said, including 9/11 and the financial recession of 2009. To move forward, Tisch called for widespread testing, liability protections, and stimulating demand to incentivize travel once again when it is safe.
Navigating the present
Most of the CEOs have discussed the difficultly of having to furlough and let go employees, but offered glimmers of hope in how to move forward.
“All of us, as leaders, have a lot of people looking to us, whether that's our family, our children, our loved ones, friends [or] the hundreds of thousands of people that wake up every day that work in these fine companies of ours,” said Christopher Nassetta, president and CEO of Hilton. “And what they need to have is hope. They need to have a light at the end of the tunnel and it's our jobs to give them that.”
Arne Sorenson, president and CEO of Marriott International, called for support from governments. “We’re advocating for the government with unemployment insurance. We need you to step in to help our hotel owners, most of whom are small businesses,” he said.
“I don't know what the trajectory is going to look like, but the business will rebuild over time and we will definitely see people return to travel,” said Keith Barr, CEO of InterContinental Hotels Group. “We're learning how to operate in this environment; we're learning how to make customers feel safe. And that's what we have to do as an industry–all of us have to work together.”
In the interim, companies can use this time to “rethink what it is that should have been working better, how you should be reorganizing,” advised Sébastien Bazin, chairman and CEO of Accor.
“We’re all trying to sort out the future of buffets, of restaurants and bars, and how do we evolve. Let’s radically reengineer the brand portfolio, let’s look at how to learn more about our businesses, and sharpen the experience,” Barr said.
“Can we adapt and anticipate those changes in behavior for travel? That is the challenge,” said Bazin.
Looking toward the future
David Kong, president and CEO of Best Western Hotels & Resorts, said Memorial Day weekend revealed “tremendous pent-up demand for the leisure segment,” adding “demand is going to be dominated by road trips. People prefer to drive in the safety of their cars than fly.”
Mark Hoplamazian, president and CEO of Hyatt Hotels Corp., also noted that people are “prepared to drive some distance to get out.” Some of Hyatt’s hotels in Arizona saw people who came from Texas on Memorial Day Weekend, while Florida properties saw people come in from multiple states, he said.
Internationally, too, people feel comfortable driving from point A to point B rather than air travel. Barr said one of the company’s Six Senses resorts in Vietnam is operating at 80% occupancy, all with domestic guests.
“We have the opportunity to learn from other markets,” Hoplamazian noted. “I see in China and South Korea the way in which business is starting to recover. Mainland China is at 40% occupancy, and has moved from exclusively leisure to bigger corporate travel, and we believe that contact tracing has yielded some confidence in travel.”
Ultimately, there was optimism among the group that, in time, things will return to normal.
“We are at double the occupancy that we were at the bottom,” Nassetta said. “I think we bottomed out at about 13 percent and we're [now] running 25% to 30%, so we’re nowhere near where we were but we have to start somewhere.
“What goes down will come back up, we all have to band together and rebuild the business of travel and tourism, in my mind at the moment, that is the mission.