Why Hoteliers Have More Pricing Power Right Now

Glenn: [00:00:01] Hey, everybody. It’s your hospitality friend Glenn here at the lodging conference. I want to thank my friends over at Unifocus, Workforce Management Redefine. Please check them out unifocus.com. Meanwhile, I found Joseph Janowsky over here. You know him from PM hotel group. And I gotta ask you, my friend, optimism is crazy out there. And I was like Chicken Little for the last year. I’m like, Sky is falling, the sky is falling. I’m like, wait, the sky hasn’t fallen? And I did a lot of research, and I came up with the conclusion that the hospitality economy has become uncoupled from the general economy. And we’re hearing all of this negativity and negativity negativity. But there seems to be this protective dome over our industry somehow. Yeah. Do you agree?

Joseph: [00:00:44] First, Glenn, it’s good to be here with you. Thank you sir. But yeah, I agree. Yeah, it’s super interesting in that the sentiment in general around the economy, the elections and everything that’s happening is, is kind of negative and would cause a lot of concern. But if you look at actual performance year to date, rev par within the US travel within the US, labor costs starting to stabilize. Very good GDP rising a little bit. Right. Then. Like for us, when we looked at our portfolio, we have double digit increases for Q4 booking pace and group in transit and in meeting and events. And now getting into the fourth quarter, we’re looking at Q1 of next year, and it’s looking the same way very, very positive trends year over year. So just because a calendar page turns right from one year to another, it doesn’t mean a trend changes or the performance that we have on the books changes. So super optimistic about next year. And underpinning all of that is the decreased supply that we all know about that is in place right now, 0.4% or whatever it is, and going to be that way for a while. So I’m pretty positive about it. The trends pretty positive about the data, and I think the sentiment will work itself out great.

Glenn: [00:02:03] So for some of our younger friends out there, what he’s talking about is the low supply is that it’s getting expensive to build. No, no a lot a new hotel. The cost of the actual construction is expensive. Getting the money has become increasingly expensive, particularly over the last month alone. So it’s kind of changing the way things are going. That’s why we’re in a conversion market right now?

Joseph: [00:02:23] Absolutely.

Glenn: [00:02:24] And for current operators, no new hotels is great for developers. Maybe not so much. But in the operating position, you’re not worried about that brand new building opening up down the block.

Joseph: [00:02:34] Exactly. And I continue to talk to my team about that. That gives us pricing cut pricing power. As long as we have the confidence to execute on that pricing power. So I think we’re in a good place. I think we keep going on ADR. Yep. I think we’re good for a while.

Glenn: [00:02:49] All right. So let me dig a little bit deeper here because I think we’re firmly in the value minded consumer, not cheap value minded consumer. Right. So how do you think about and you mentioned the word tripper before. Total revenue per customer. Right. How are you thinking about all of that to give people value while getting premium pricing continuing to go forward.

Joseph: [00:03:12] So I’m going to bring up something that everybody’s talking about, but I didn’t think we’d be talking about AI. Yeah. So for me and for us, what we’re looking at is AI as a way to free up our associates to be in the place they need to be at the level they need to be there when the customer needs them, creating that value and that personal touch which drives value. Right. And then charging for it. Yeah. Right. And like that for me. And it’s hospitality business. That’s the key to our success and to value creation is that interpersonal experience, the personalization of it and moving forward. Yeah.

Glenn: [00:03:53] Awesome, I love it. Any anything you want to tell these folks about going out in the future? Maybe a piece of advice.

Joseph: [00:03:59] A piece of advice. Okay, so here’s what I know. And specifically about some concerns about AI and in particular our industry about it and causing job loss. This is a customer business. And then also AI is never going to replace actual intelligence. We are not looking at cognitive handover. We are looking at an assist that, to your point earlier, drives value for the customer value for price paid for us to be able to charge more.

Glenn: [00:04:31] And that’s why you’re getting tired of hearing me say, we’re keeping the humanity in hospitality because that is the way it’s going to be. Joseph, thank you so much.

Joseph: [00:04:38] Thank you. Glenn, good to be with you.

Glenn: [00:04:39] I really appreciate it. Please like, share, subscribe, check out my friends over at Unifocal unifocal.com. See you later. Bye bye.