The world’s most important hotel executives on what will impact your future travel

Summer travel season is here and most of us are trying to get through the chaos of airports and long hotel check-in lines without completely losing patience.

Ah, yes, and don’t forget all that The Americans headed to Europe this summer for Taylor Swift’s “The Eras Tour.” (I am guilty as charged here. Twice.)

Yet earlier this month, CEOs of the world’s largest hotel companies convened at the NYU International Hotel Industry Investment Conference for their annual discussion on the state and future of the industry.

From the explosion of budget brands to the persistence of high hotel prices, the leaders of Marriott International, Hilton, Hyatt, IHG Hotels & Resorts and Accor had a lot to say about the What will impact the way we travel in the coming months and years?

Related: Top travel tips to keep your summer trip on track and on budget

The growing middle class ushers in brand expansion

If you look at the variety of new brands launched or acquired in the hotel sector over the past two years, it is easy to surmise that major hotel companies see opportunities in the travel segments. More affordable calendars. Brands like Hilton’s Spark, Marriott’s newly announced Mid-T project, Garner of IHG, Hyatt Studios And Accor handwritten collection All operate in the mid-range and high-end market segments.

What gives all this middling love? The middle class is exploding around the world.

“If you look at this industry 10 or 20 years from now or for the rest of my life, the rest of my life in this room… it’s basically going to be a very good run for tourism and travel ,” Hilton CEO Christopher Nassetta said during the NYU panel. “Why? Megatrends in demographic growth [and] middle class – that continues to happen.”

Accor CEO Sébastien Bazin added, “Emerging middle class: This is the trend. The emerging middle class population is growing: more than a billion people.” [added] in 10 years ago [and] you will [probably add] 1.3 billion over the next 10 years, perhaps 25% coming from India but [also] from Mexico, South America [and] many other places in Southeast Asia.”

The growth forecast for the middle class comes as companies like Marriott acquire and grow brands like Express city in Latin America and Four quick points in Europe, the Middle East, Africa and Asia.

“There are some great markets in the world that have this booming middle class and they want to see the world,” said Marriott CEO Anthony Capuano.

The law of supply and demand keeps hotel prices high

While hotel giants have shown interest in entering more budget-friendly travel segments, the budget hotel space has been a hit in recent weeks. where travelers can find discounts. However, CEOs of major hotels say it’s still a bit early to get excited about the idea of ​​widespread price cuts across the industry.

Simply put: There aren’t enough hotels being built to meet demand. Interest rates are too high to continue new construction, so most growth comes from converting existing hotels into new brands — adding rooms to a company’s portfolio but not adding additional resources. new supply to the overall market.

“We are still under quite a bit of price pressure because of good demand and low supply,” Nassetta said. “Over the next few years, you will have a super cycle of capacity additions that is very low by historical standards.”

But don’t worry — the industry is realizing the need to offer services to everyone and every wallet. That’s why you see so many new mid-range and high-end brands emerging. IHG CEO Elie Maalouf pointed to his company’s brand lineup, which ranges from the affordable Avid and Garner to the ultra-luxurious Regent and Six Senses, as examples.

“Most of our business is daily travel,” he said. “We have a vacation for everyone. You can still book now for June and July in the United States for plus or minus $100 at one of our Holiday Inn Express hotels in resort destinations. For most people, this is still very affordable. But if you really want to pamper yourself, I think we all have the products and experiences that you have can really splurge.”

(And if you’re looking to spend it through IHG, I can recommend it Regent of Hong Kong or Regent of Phu Quoc?)

The future of AI and hotels

Like any industry, the hospitality sector is pursuing an artificial intelligence strategy to make things more efficient for the workforce and travelers alike. On the workforce front, it’s largely due to an ongoing labor shortage: Before the coronavirus pandemic, there was already a shortage of hotel workers, and the global health crisis has only exacerbated that.

“If you don’t use technology, you won’t be able to operate these hotels effectively,” Maalouf said.

Other hotel CEOs agree that technological innovation is critical to addressing a labor shortage that is unlikely to go away anytime soon.

“Let’s face it, how many years have you been trying to achieve a common-sense, unified immigration policy in the United States? A lot, and probably a lot more to come before we get to such a policy,” Hyatt CEO Mark Hoplamazian said. “There are ways in which you can actually maintain full employment as it is, although you have opportunities available to hire people and make this more efficient and effective in the way you staff stores and restaurants, how to staff parties and events, how you staff parties and events.” you are the housekeeping staff and how do you visit the technical staff.”

Headache about the hotel

While unruly guests or staff shortages seem to be the top contenders for keeping hotel CEOs up late, there is a consistent response that geopolitical tensions and unrest around the world are the headaches for traveling at the present time.

“Our industry thrives in times of peace and stability,” Capuano said. “You have four billion people voting this year. You have the possibility of a tectonic shift in the geopolitical landscape, and that level of uncertainty is not particularly helpful to the field.” tourism and travel sector.”

But there is also optimism about what tourism can do to alleviate some of the stress.

“There is more and more division and somehow more and more actors are trying to cause more division,” Hoplamazian said. “I think we can be the antidote [and] Our industry can be the antidote to that. But I think we need to play that role because we need to promote understanding instead of all this friction.”

“My only headache is geopolitical instability,” Bazin added. “Travel is the best medicine. The more you travel and experience other people’s cultures, the more you agree.”

Related reading: