NEW YORK—On day one of the International Hotel/Motel & Restaurant Show, during the Hospitality Leadership Forum, Jim Abrahamson, president of InterContinental Hotels Group, joked that his company "canceled the rest of 2009" in order to shift focus to 2010. And even though most of the hoteliers in attendance at the Jacob K. Javits Convention Center for the International Hotel/Motel & Restaurant Show laughed, everyone surely hoped it was possible.
Abrahamson was joined by Hubert Joly, president & CEO of Carlson, and Jeff Wagoner, president of the Wyndham Hotels and Resorts, on the CEO Leadership Panel panel and, as leaders often do, they maintained as much optimism as they could, but delivered a clear message that 2010 is going to be a battle for the industry.
Abrahamson forecasted a long, slow recovery curve, and instead of using the typical U, V or L shape comparisons, he used an identifiable brand logo.
"We think it looks more like a Nike swoosh," he said, "A sharp dip and a long climb up."
And any recovery that does take place, he said, is not necessarily going to be industry-wide. He made a distinction between the "haves and the have-nots" of the market.
"The haves are markets that have a great location or destination people want to go," he said. "Have markets have a good employment base and a good manufacturing environment or an oil patch ... they have some dynamic element. Or they also have a renovated hotel, or new or repositioned hotels, and they're doing OK now.
"The have-nots are really struggling. It's a tale of two worlds. They're not in a good location ... there's no Nike swoosh there. I don't know what brings back Janesville, Wisc."
All Abrahamson and the other CEOs on the panel know for sure is what their company's plans are to stabilize and meet the swoosh head-on. In particular, Abrahamson said IHG is increasing marketing efforts, and increasing the sales team by 30 percent to prepare for "hand-to-hand combat for market share." He believes guests are looking for quality more than price. His evidence is the revenue per available room lifts the repositioned and renovated Holiday Inns in the company's portfolio have shown.
Joly believes the industry is at the bottom of the decline as illustrated by the stabilizing occupancy rates. His basic message: "We can't control the market, but we can control our market share."
He highlighted several trends currently affecting hospitality: the loss of glamour in travel; companies tightening their budgets; the hassle of travel; the shame of travel; a changing consumer focused on value, quality, experiences and cultural enrichment; a change in generations between Baby Boomers and Millennials; and emerging countries like China, which is growing at 8 or 9 percent.
Carlson's plans for dealing with these trends in order to gain market share includes building a global, multinational management team and focusing on how its brands "make sense in this new environment."
"Country Inns & Suites is very well positioned. ... Raddisson is good internationally, but it needs some work in the U.S.," Joly said, noting the improvement will come largely from design with a focus on new concepts and brand standards. "We didn't have design standards, just technical standards."
Wagoner identified with Joly's goals for Carlson, as brand clarity has been Wyndham's answer to both the recession and its company's future plans. He reminded everyone in the room to be very focused onn 2010, even though it's easy to want to look past it to 2011, when experts believe the true recovery will begin.
Wyndham is taking a methodical approach by creating a five-year plan for all 11 brands that includes 21 points. The major points of emphasis are international expansion, brand clarity and technology.
"Our business has been franchise heavy, not a lot of real estate owned by the company, but we're still feeling the same drops," he said."Our real focus is on revenue [growth], utilizing new technology and new stategies for driving revenue."
