Go Ask ALIS
From big data to Airbnb, this year’s lodging investment summit in Los Angeles showed forward-thinking concepts can have major return.
Of course, everyone heads to Americas Lodging Investment Summit (ALIS) with money on her or his mind. But this year’s conference, held Jan. 23-25 at the JW Marriott and Microsoft Theater at L.A. LIVE, was as much about tomorrow’s trends as last year’s numbers.
Several sessions touched on the evolution of data collection and its possible implications on the guest experience. Responsive robots, including a replica R2D2, roamed the ballroom corridors. Innovative and reimagined hospitality models—from the evolution of what it means to be boutique, to flipping existing apartment buildings into pop-up luxury hotels, to new brand incubator concepts—were at the forefront of the three-day summit’s hot topics. And while most speakers prefaced with “politics aside,” many noted they were “cautiously optimistic” about the Trump administration’s impact on the U.S. economy and what it will mean for the travel industry.
Here a few takeaways from the conference’s roster of panels:
Big data may have a big impact: “You already have the data—your guests are giving it to you—you’re just not using it,” said James Whittaker, Microsoft’s “distinguished technical evangelist,” during a TED-style talk in the Microsoft Theater. With the World Wide Web’s migration to “the Cloud,” data that was once scattered can now be organized. This is why machines, such as self-driving cars, are smarter than ever, noted Whittaker.
What does this mean for hoteliers? Well first off, they need to leverage their social media in a new way. Whittaker said intent to travel starts on platforms like Facebook and Twitter and operators shouldn’t wait for guests to download a brand’s app or find the hotel’s website. Instead, he suggests they use data to find out who is looking for properties like theirs—as well as gauge upcoming guests’ preferences.
In an earlier session the same day, Christine Warner, Facebook’s U.S. head of industry, travel, said the guest experience starts 43 days prior to arrival and that in that time, customers are spending more time on Facebook than any travel site. She suggested using digital platforms like Messenger to connect with guests before their stay. However, if that information doesn’t make it from marketing to the front desk to housekeeping, it’s pretty much useless, noted Alexander Shashou, president/co-founder of ALICE-App, a hotel operations platform.
But how will leveraging data impact design? Ideally, it will make it more functional. Micah Green, president and ceo of Maidbot and 2015 graduate of Cornell University, is launching a robot that he believes will revolutionize how we clean. (I think it may alter hospitality designers’ approach to interiors, as well.) In addition to upping efficiency, consistency and safety for housekeeping, his company’s Rosie robot also collects data while she sweeps. She can detect where Wi-Fi is weak, areas that are at risk of mold growth and even what type of fluid was the culprit for that questionable floor stain. But this data could also be leveraged to recognize drawers that aren’t being used, where different types of guests drop their bags and which bath fixtures aren’t working. With time, data collection from in-room robots could be a designer’s go-to when determining project layouts, furniture placements and even sourcing products. (Side note: Rosie is about the size of a Roomba and half as loud as the average vacuum.)
Seeing is believing: ALIS devoted a whole panel to the tools and applications associated with virtual reality (VR). In the age of user-generated content and guest reviews, the worst thing an hotelier can do is attempt to hide flaws.
Dorothy Dowling, chief marketing officer of Best Western Hotels & Resorts, said customers want to see professional and user-generated content together. She views VR as a natural evolution of 360 tours, and noted that Best Western has been an early adopter of the technology. Having invested $2 billion in the guest experience, the brand’s need to convey its product improvement to potential guests is crucial.
Of course, the increased prevalence of VR marketing ups the ante for designers, too. Cluttered layouts, forgotten ceilings and anything else that may have been concealed with traditional photography are not only an on-site turn off, but reservation deal breakers.
Dowling added that an unexpected benefit of VR has been the B2B effect: Buyers can now see their investments and experience the product without traveling to the location. Greg Jones, director, AR/VR for Google Inc., pointed out that VR is also having a huge impact on design and architecture—a trend the hospitality interior design industry has already seen with the implementation of VR models within their own firms and the rise of creative communications studios such as SONNY+ASH.
If you’re not paying attention to Airbnb, you might be in denial: “I instinctively feel Airbnb is a real threat,” boutique hotel pioneer Ian Schrager, chairman and ceo of his eponymous company, said in an on-stage Q+A shortly after receiving the ISHC Pioneer Award. He likens Airbnb’s impact on hospitality to Uber’s effect on the cab industry.
In a session the previous day, Brenna Halliday, vice president, strategic analysis for Host Hotels & Resorts, shared a different perspective, noting that hospitality professionals once viewed teleconferences as the possible end to business travel. While she admitted the industry “has been slow to respond to travelers shifting preferences,” she noted demand is higher than ever and that Host—whose average traveler stays two nights opposed to Airbnb’s seven-night guest—isn’t feeling an impact from the platform.
But the expansion of the online homestay network has been significant—and rapid. Last year the company generated a whopping $6.8 billion in revenue (in 2015 that number was $2.7 billion), according to the aforementioned session, which included Halliday as well as panelists from CBRE Hotels Research, Vornado Realty, Two Roads Hospitality and Airdna, an independent Airbnb data and analytics company. From 2015 to 2016, Airbnb had significant growth across the board, from a total supply of 37,344,113 to 81,037,452; demand of 17,988,315 to 39,836,147; occupancy of 48.2 percent to 49.2 percent; and RevPAR of $73.17 to $83.55 (the latter is a growth rate of 14.2 percent).
However, some of Airbnb’s new units don’t actually account for new supply growth, explained Candace Johnson, vice president performance optimization for Two Roads. She and Airdna ceo Scott Shatford attribute some of that perceived growth to existing units, which previously used other marketing platforms or now take a multi-marketing approach by utilizing marketplaces such as HomeAway in addition to Airbnb.
“Airbnb has surprised us,” said David Kong, president and ceo of Best Western Hotels & Resorts, during one of the Boardroom Broadcast panels. “I don’t understand how a lot of big brands would say there’s no impact.”
Another note: In addition to the residential and authentically local vibe, Airbnb’s success is partially due to its ability to leverage data. “They have a huge head start on you,” proclaimed Microsoft’s Whittaker. Airbnb’s guest profile platform allows its property owners to gauge travelers’ preferences—from mountain biking to craft beer—before they arrive.
Forget old money; millennials are the new luxury traveler: Gen Y is getting a little older, and gaining a lot more spending power. “Millennials are now the luxury travelers,” stated Adam Weissenberg, partner, Deloitte, who moderated another Boardroom Broadcast. Langham Hospitality Group ceo Robert Warman added that the industry used to think of millennials as post grads, but many of them visited luxury hotels growing up.
However, those born between the early 1980s and late 90s tend to jump in and out of the luxury segment. They’re also less loyal to brands, and crave escape from touristy settings and immersion into the local community, added Chris Cahill, ceo luxury brands for AccorHotels. Trump Hotel Group ceo Eric Danziger noted that the purpose of his employer’s latest brand, Scion, is to grab the luxury traveler earlier.
Looking ahead, major hoteliers will continue their global expansion. (Well, most of them.): While there has been a deceleration of RevPAR growth since late 2015, Mike Barnello, president and ceo of LaSalle Hotel Properties, said he feels there is currently an uptick in overall sentiment. In a different session, Jim Amorsia, ceo of G6 Hospitality, said “things have gone back up” following the U.S. presidential election.
Many speakers throughout the conference expressed feelings of “cautious optimism” with hopes that with increased inflation and decreases in taxes people will be spending more. Barnello noted that from a travel perspective, many want a weaker dollar.
While Chinese buyers may invest less in the U.S. this year, the country will still have major relevance for the industry. Warman said he predicts the impact of China and travel within that country will only grow. Meanwhile, Wyndham Hotel Group president and ceo Geoff Ballotti stated that company will continue its international growth in places such as Argentina, Paraguay and Costa Rica.
One hotelier that probably won’t expand internationally, at least for now, is Trump Hotel Group. Danziger stated that while ideally he’d like to expand Trump Hotels overseas, it’s unlikely to happen, drawing a laugh from the audience as an apparent reference to President Trump’s stance against globalization.
A great deal of other forward-thinking thinking and progressive ideas—including how important diversity in the decision-making rooms of all companies/firms is to delivering a holistic guest experience—were on tap during the three-day conference.
Boutique Design also hosted a buzzing Drinks by Design cocktail party celebrating the fifth edition of the upcoming BDwest at Upstairs, the rooftop bar at Ace Hotel Downtown Los Angeles, in conjunction with ALIS. Speaking of BDwest, for more forward-thinking ideas on the future of hotel design, be sure to join us for the two-day trade fair and conference, to take place Wednesday and Thursday, April 5-6, at the Los Angeles Convention Center.
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