Lodging Leaders

U.S.-China trade war. Design-savvy online furniture retailers. Hurricanes. Marijuana.

These things and more are having an impact on hospitality purchasing. And they’re influencing the prices of hotel FF&E and OS&E as well as the cost of construction.

In this episode of Lodging Leaders, we talk to specialists in procurement and logistics to find out the trends and challenges facing the hospitality industry as it continues to build new hotels and renovate existing ones.

We find out what’s costing your project more money than it should. And we identify opportunities and pitfalls to be aware of while in the planning stages.

We talk to Marla Davis, senior vice president of procurement at Premier Project Management; William Langmade, CEO of Purchasing Management International; and Darlene Henke, president and CEO of Audit Logistics.

It’s a given in today’s technological age that you operate a hotel business that depends on technology to process customer credit card purchases and to store personal information about your guests that helps you serve them better.

In addition, you probably are aware of cybercrime and that nefarious hackers frequently target payment systems. You’ve done all you can to make sure your customers’ data is secure, even adhering to payment card industry data security standards or PCI DSS and other processing protocols such as the European Union’s general data protection regulation or GDPR.

While it’s a smart move to be PCI and GDPR compliant, that does not fully guarantee your hotel data is safe from hackers.

There is more you can do.

If you think the threat is just too big to handle, know this: A data breach at your business is probable and it will cost you a lot of money.

A new IBM report notes the average cost of a data breach in a U.S. business is more than $8 million. Most of the cost is the result of lost business, meaning travelers stop coming to your hotel because they don’t trust the security of the technology.

The bigger the loss of data and the longer the breach goes undetected, the more it will cost you.

In this episode, Lodging Leaders explores the topic of cyber security and what steps you can take to protect your business information.

Co-host Judy Maxwell attended the HFTP’s 2019 Annual Convention in Orlando, Florida, last month. She covered presentations on cyber security and interviewed the presenters.

Included in this report are Ron Hardin, director of information technology at Sandestin Golf and Beach Resort; Paul West, a risk management and technical adviser at GapSpot!; Jen Stone, senior security analyst with SecurityMetrics; and Scott Boren of Boren & Associates, a compliance auditor.

Taco Bell made headlines when it opened a 70-room pop-up hotel in August in Palm Springs, California.

It was a marketing scheme that lasted four days.

The day The Bell Hotel began to accept reservations, it sold out in two minutes.

The guaranteed novelty of staying in a Taco Bell hotel obviously paid off for the company, but it’s not the only fast food business that has ventured into the hotel space.

Ten years ago, Simon Woodroffe, founded YO! Sushi, which delivers food on a conveyor belt and has robots that deliver drinks. Woodroffe went on to use his technology and design prowess to co-create Yotel hotels with Gerard Greene.

Yotel began with technology-enabled sleeping cabins at airports.

Today, Yotel Hotels & Resorts is a sustainable hospitality company that recently launched an ambitious plan to expand its presence around the world.

In this episode we talk with Hubert Viriot, CEO of Yotel Hotels & Resorts for the past five years, about the company’s growth strategy.

Also featured is Christopher Grey, chief technology officer at Intelity, which recently teamed up with Yotel to scale its innovative, tech-forward guest-services platform.

And we include some audio clips of Woodroffe talking about the early vision for Yotel.

Though average daily rate in U.S. hotels continues to grow year over year, hotel operators are not so eager to increase room prices these days.

STR and Oxford Economics forecast ADR will increase by 1.9 percent this year and 2.2 percent in 2020.

While an increase is usually viewed as a positive, the joy is muted in the hotel industry. STR noted in August that inflation coupled with increasing room supply are outpacing the rise in hotel revenue.

Hotel operators are experiencing what STR calls “an absence of pricing confidence.”

So, you don’t want to increase your room rate but you need to make more money.

How do you do that? You upsell. You offer additional products and services to guests who have already booked at your property.

Think you do not have anything to offer besides a clean room and free breakfast? Think again. Generating extra revenue by upselling is possible no matter the location, type and size of your hotel.

In today’s episode Lodging Leaders talks to experts in upselling in the hospitality industry.

You’ll hear from Geoffrey Toffetti, president and chief marketing officer of Frontline Performance Group, and Jason Bryant, founder and CEO of Nor1.

They talk about the art and science of selling upgrades and when to engage the guest with offers. And they give tips on ways to increase incremental revenue that goes straight to your bottom line.

It’s often said the U.S. hotel industry is a street-corner business. With that point of view, it may not take much for a hotel operator to panic and set off a price war on your block.

The industry fell victim to mindless discounting in the days immediately after 9/11 and during the depth of the Great Recession.

Today’s hotel owners and operators like to think they’re smarter than that.

Over the past decade, revenue management – the science of smart pricing – has become a standard practice.

At the same time, technology providers have created automated programs that help properties determine the right price for the right guest at the right time. And hotels have a long list of online channels where they can advertise rate and convert browsers to bookers.

As the industry begins to see a slowdown in business performance, Lodging Leaders explores how hoteliers should be pricing now and in the near future.

We interview several specialists and technology innovators who focus on nothing but revenue management for hotels.

They share what to do if a hotel in your market starts to discounts rates; how to use online booking channels to generate more business; how far out to plan your revenue strategy; and what tactics to deploy to optimize profit.

At the peak of a great upward climb from the Great Recession, the U.S. lodging industry is seeing a leveling off in business performance.

During the 25th annual Lodging Conference in Phoenix last week, many industry experts talked about a new normal of muted revenue gains and thinner profit margins as expenses continue to grow.

The biggest and fastest-growing operating expense in the hotel industry today is labor.

STR reports U.S. hotels saw labor costs grow an average 3.7 percent from 2016 through 2018. Those three years are the only period in the past 20 years in which labor costs exceeded revenue growth.

Although industry analysts cite much-talked-about causes of increased labor costs such as minimum wage laws and a tight employment market, some of the reasons your hotel is wrestling with the expense are not so obvious.

In this episode of Lodging Leaders – the second in a two-part series about hiring and labor – we explore how you can get a grip on labor costs, become more efficient in scheduling employee hours, and manage employees’ work expectations.

We hear from Del Ross, chief revenue officer at Hotel Effectiveness; Bryan DeCort, executive vice president at Hotel Equities; and Bruce Barishman, vice president of operational excellence at Interstate Hotels & Resorts. We also include excerpts from a presentation by economist Bernard Baumohl at The Lodging Conference.

Is your hotel a fun place to work? Do your employees look forward to spending their day at your hotel?

If the answers are no, then your business is in trouble.

Do you have difficulty keeping good employees? Do you see staff members whispering in huddled groups? Do you or your supervisors work behind closed doors?

If the answers are yes, then your business is in trouble.

Many hotel managers know how to build a culture of service to attract guests. At the same time, they may overlook the needs and expectations of the other people in the building.

Successful leaders not only focus on creating positive experiences that acquire guests and build customer loyalty, they expand those strategies to the hotel’s workforce to attract and keep good employees.

This episode of Lodging Leaders explores the concept of workplace culture, and why it matters, especially in today’s tight labor market.

We talk about how a positive work environment can make your hotel business, and how a toxic atmosphere can break it.

We interview Del Ross, chief revenue officer at Hotel Effectiveness; Carrie David, chief human resources officer at Interstate Hotels & Resorts; Chris Bennis, a recruiter with Snelling Hospitality; Bryan DeCort, executive vice president at Hotel Equities; and Nancy Curtin Morris, vice president of learning and people development at Hotel Equities.

More than 20 years ago, a team of hotel industry consultants and asset managers got together to figure out how much hotels in the U.S. spend each year on property improvements and maintenance.

The idea was if owners and operators know in advance what it will cost to keep a hotel property up to date and in good working order, it would help them put the right amount of cash in reserve to deal with the expected ,as well as the unexpected.

In 1997, David Berins and Peggy Berg produced the industry’s first CapEx study. They recommended hotels increase their capital reserves from 3 percent, to 4 percent, to afford pending property improvement plans and inevitable equipment replacements.

Today, that 4 percent is still regarded as an industry standard. But modern day consultants say the reserve benchmark is woefully underestimated and CapEx planning is so much more complex than it was two decades ago.

So how are hotel owners and managers supposed to plan? And by how much?

In this episode, Lodging Leaders explores the latest CapEx report researched and published by two organizations – the International Society of Hospitality Consultants and the Hospitality Asset Managers Association – with the help of STR.

We feature David Berins of Berins & Co., who says he coined the CapEx abbreviation. We hear from Alan Benjamin of procurement firm Benjamin West, who has co-chaired the past several CapEx studies. And we talk to Matthew Hick of Access Point Financial, a specialty hotel finance company that lends for FF&E projects.

When Robb Monkman was a college student, he and his roommates were robbed at gunpoint. The home invasion and hostage taking rocked Monkman to his core and determined the course of his career.

Monkman is founder and CEO of ReactMobile, which provides electronic security devices, or panic buttons, for businesses, including the hospitality industry.

ReactMobile is among several technology companies included in the American Hotel & Lodging Association’s Five Star Promise, a pledge by major hotel companies to establish and implement best practices to protect their employees. The promise includes the deployment of hand-held technology, hospitality workers can use to summon help in times of crisis for themselves or guests.

In this episode, Part Two of Lodging Leaders’ report on hotel safety and security, we explore panic button technology and trends. We interview advisers on what’s available to hotel owners and operators as they work to come up with methods to protect their employees. We also review AHLA’s Five Star Promise and what it is calling the hospitality industry to do. And we talk with Unite Here, the labor union that got the whole thing started.

“Active shooter” is a term used by law enforcement to describe a situation in which a shooting is in progress.

The classification calls into action protocols relating to response and reaction – not only by police but also by citizens, says the FBI. In the case of an “active shooter,” everyone’s response and reaction can affect the outcome.

The bureau has counted 288 active shooter incidents in the U.S. from 2000 through 2018.

Twenty-one of those occurred at places of business. Of those, five were at hotels or motels.

Though lodging accounted for less than 2 percent of all active-shooting incidents logged by the FBI over the past 18 years, it’s an unfathomable crisis if it happens at your property.

Many safety and security experts say hotel owners and operators must have a mindset of “not if but when” in preparing for the possibility of an active shooter on property. And some veteran hoteliers say, it only makes sense that the act of hospitality is extended before, during and after times of crisis.

Today’s episode of Lodging Leaders is the first part in a report about hotel safety. We cull information from the FBI, the U.S. Department of Homeland Security and Hospitality Financial and Technology Professionals (HFTP), a non-profit organization that published a white paper about hospitality attacks.

We talk to Paul Frederick, a security and safety expert and co-founder of Hospitality Security Advisors, and Elie Khoury, executive vice president of operations resources at Interstate Hotels & Resorts, a third-party manager.

Also featured are Roger Bloss, a veteran hotelier who is putting his weight behind a new hotel insurance program called InsuraGuest, which plans to offer coverage for guests injured in an attack on property. Also included is Natalee Bloss, Roger’s daughter who was at the scene of the Oct. 1, 2017, shooting in Las Vegas and sought safety at her family’s hotel.