The Great Hospitality Squeeze: Mark Carrier on Surviving Margin Pressure & Finding Real Opportunity

Glenn: Hey, everybody. It’s your hospitality. Friend Glenn here at The Hospitality Show. And I’ve got with me Mr. Mark Carrier, president of B.F. Saul and Co. and so I’d like to take a moment to thank my friends over at Entegra. Listen, thanks for getting more expensive out there. Get into the power group purchasing EntegraPS.com. Coincidentally, we happen to be talking about that topic right now. So it’s not necessarily group purchasing, but the whole idea that we’re all getting squeezed, customers are getting squeezed, hoteliers are getting squeezed, and I’m getting anxious out there. How are you feeling right now at the end of October 2025? Well, Glenn, I share your anxiousness. I wish you were not. Yeah, I do, I do as well.

Mark: And it really comes down to the fact that we have industry growth trends that are going negative. Right, right. And then the cost structure by which we operate all our hotels, whether it’s labor, insurance, interest rates, you name it, everything is pressured in that different direction.

Glenn: Right.

Mark: It’s a big.

Glenn: Squeeze. It’s kind of like you take a look at any one thing. It’s okay. But it’s kind of like death by a thousand cuts, because every single thing is ratcheting it up. And we were having a hard enough time, I thought, dealing with the the rise in, you know, the the cost of labor. Yes. Everyone deserves to pay a living wage. Not saying that. It’s just that, you know, it changed everything and then everything else kind of piled on.

Mark: Yeah. And I’d also say Brent, for many of us, we never really did recover from Covid, right, right. Because that forced many owners in particular to consume a lot of their bench capital or their balance sheet. Right. And we delay doing a significant amount of renovation.

Glenn: And I think not to interrupt you, but I think the brands allowed that to happen for a while. Right. And it kind of it’s kind of set up a different type of dynamic today because people have less cash on hand.

Mark: Yeah, I think that’s very fair. And there was no option but to do that.

Glenn: Right? Right, right. Yeah. No, no one’s wrong here. It just is what it is. Yes.

Mark: So we’re working through these periods of time where our balance sheets really got hit. The everything in the entire income stack, let’s call it, or the income statement is under pressure. So, okay, what’s what’s an owner.

Glenn: To do exactly. What’s an owner to do. Because you can’t keep pushing those rates. Those halcyon days are I think, behind us right now. Right. So what do you do?

Mark: Well first of all, just to stay with one thing, the revenue side of the equation and the guest service side of the equation has got to stay at the absolute forefront of our efforts, because that’s what drives our business. Right. So that means your direct sales, your revenue management teams, your marketing. You can’t back that off because you’re just hurting yourself.

Glenn: Right. And I find Mark, that a lot of times the natural instinct is to cut back on that first. But I think you’re doing yourself a disservice.

Mark: Frankly, the it’s like when you’ve got a great football team or any kind of a sports team, you need those players, right? You need those people because they absolutely make a difference. And if you have very talented people like I’m blessed with, then the motivation, the focus, the effort, the energy and staying positive. Right. Really important. Yeah. Even in a tough time. And as a leading voice for our industry and for me and my own role of leadership, if you’re getting really down, it doesn’t help. Right? That’s that’s not going.

Glenn: To help you. You just wind up in a negative mindset. And, and as we were all as an industry working through Covid together, I found one of the best strategies was to be positive. Yeah, we have challenges, but challenges always means opportunity. So let’s switch to the opportunity side. Where do you see that.

Mark: So staying on top of where top line management etc.. We are in a period in the industry where you’re going to see less new starts. Yep. And maybe, you know, continued moving around between brands and.

Glenn: This is I actually got some numbers behind that. New starts are way down, even though the overall construction pipeline is at record levels. That’s because it’s taking a lot longer for those shovels to actually get in the ground. Plus, conversions are absolutely huge right now. So unless you’re doing conversions or building extended stay hotels, new development is.

Mark: I think you’re absolutely right. And the data the data would bear that out. So I do think there’s a real need for our industry, frankly, to work collaboratively. Now I’m flying my Hmla pack because as a former chair, we see that organization as the the one by which we brands owners, management companies are vendor community. Our partner community can all come together to work on solutions. And I do think we’ve got to focus on a couple of big ones and one of them in particular is the cost of intermediation or the cost of of revenue delivery. Right. So that’s everything from the commissions we pay to the transaction costs to the third party issues that we have.

Glenn: So what we have and check out some of my other videos, we’re focusing on Agentic AI and the opportunity for hospitality to really change how people book rooms in the future, which plays into that.

Mark: Well, it’s it’s a huge issue there. And for those of us that operate branded hotels. Yeah. And we’re proud to affiliate with Marriott and Hilton and IHG. We’ve even got a nice Best Western hotel. And we do affiliate with Leading Hotels of the world. So all of those guys. So we have a lot of faith and confidence in them. But they really need to step up and lead in this world of AI. Yeah, there there’s got to be a real focus on how they deliver because we don’t own the data that they do. So our our guest data is not ours.

Glenn: But you can get guest data if they check into your hotel. How do though? How does that really?

Mark: Yes and no. Right. Because if you’re operating a branded hotel with a branded PMS and all that data is in the cloud and we don’t own it. Yeah, that’s the issue, right? So it’s not like we’re running a local server where that information is resident. It’s actually all uploaded to the crowd. Most of the front desk computers are just transaction terminals.

Glenn: I say we go back to the on premises stuff. I got an IBM PC XT with ten megabyte hard drive. Right? Right. Now, anyone who’s interested, I’ll be giving us before we wrap up today, one piece of advice going forward on how to get through difficult times. And I acknowledge that no matter what happens going forward, it’s not going to be like 2020. So if we got through that, we can get through anything.

Mark: Yeah, I think it’s it’s critically important to maintain the positives. Right. But not foolishly positive like positively Pollyanna. Yeah. Tactical have a business plan that you’re evolving it constantly. They can’t be scattered. In many cases, you’re not even multiyear anymore. They might be multi-month, right? Because things are just moving so quickly. Stay committed to the core of hospitality, which is our people and service and taking care of the guests, which is just a 101. Right? We know that’s that’s the baseline. But I think it’s going to be a challenge over a period of time, you know, and.

Glenn: It’s going to be a challenge, but you guys are up to the task. We’re all up to the task. Hospitality is the best business in the world and we can make it happen.

Mark: Thank you Glenn. And that partnership between the brands, owners, management companies through the H and Ella can be very, very powerful. But we’ve got to do it.

Glenn: Yeah, sure. Dan and I love that you guys had a big meeting here. Yes, for example, with Arla. So Hey, thanks. Like, share, subscribe. All that kind of good stuff. Mark Carrier, Glen Housman. Integra. Com. See you later. Bye bye.

Mark: Yes.