The author points out how the great leaders of the hotel industry are acting to energize the industry and face the new challenges that will arise. By Glenn Withiam*
In October we invited about 225 business and academic leaders to come to Ithaca to discuss ideas to improve the hotel industry. This was the first Cornell Center for Hospitality Industry Research (CHRS) Conference. Participants came from twelve countries (apart from the United States), including Costa Rica, Mexico and Uruguay.
At the event we offered 49 individual presentations, including lectures by four renowned speakers: Christine Duffy, President and CEO of Maritz Travel Company; Adam Goldstein, President and CEO of Royal Caribbean International; Gerald Lawless, CEO of Jumeirah Hotels and Resorts, and Randy Smith, co-founder and CEO of STR.
Some topics were a constant in the four conferences: the economic importance of the global hotel industry, the need to achieve an operation of the industry that is respectful of the environment and the importance of implementing changes in technology and social media.
Like other companies, Maritz handles incentive trips and group meetings for numerous corporate clients, which involves acquiring hundreds of thousands of lodgings per night. Christine Duffy of Maritz gave an example of how to emphasize the economic importance of our industry so it can influence lawmakers.
When U.S. politicians began criticizing the expenses incurred on account of corporate meetings, in conjunction with the federal bank rescue plan, she and other business leaders participated in a meeting at the White House to demonstrate the importance of the industry in terms of jobs and economic activity.
Abu Dhabi-based Jumeirah owns or operates 52 overseas hotels, including the Jumeirah Essex House in New York. Gerald Lawless made an urgent appeal: "We need to remind lawmakers that tourism is a positive force." He pointed to figures showing that the travel and tourism industry accounts for 9.4% of global gross domestic product and 8.2% of global employment.
To stimulate the travel industry, he suggested simplifying Visa requirements, opening the skies to other aviation companies and reducing taxes on tourism operations, among other initiatives. Lawless also offered several examples of how sustainable practices benefit the industry, particularly when hotels take into account both environmental and social aspects when making their development and operating plans.
Royal Caribbean's fleet of ships has increased from 13 in 2000 to 22 in 2010. Adam Goldstein sees social media as a fundamental part of RCI's ongoing brand redefinition and modification process.
"Our goal is to make people feel involved," he said. "We have gone from what I have called 'generic excellence', which involves offering services based on what a group of people want, to 'specific excellence', which means offering services to people individually. People expect their opinions to be heard and taken into account when taking action."
Randy Smith has created an industry-wide database of hotel market information. He also discussed the importance for hotels to deal with the new technological environment. He noted that demand has been rising, but room rates have slowly recovered. One reason that could explain this phenomenon is the interaction between hotels and online travel agencies. "The real dimension of the interaction between the hotel industry and online travel agencies (OTAs) remains to be seen," he announced.
One thing that's clear, Smith admitted, is that the hospitality industry has been careful to maintain operational efficiency. This was demonstrated by the fact that the sector as a whole remained profitable in the period of the Great Recession, with a much lower level of employment than in other periods of recession.
In conclusion, it is clear that the hotel industry faces considerable challenges. However, based on these four presentations and the other 45 that took place at the CHRS conference, it is also evident that industry leaders are working on these challenges and are ready to face them.
* Glenn Withiam is director of publications for the Cornell Center for Hospitality Research.
