We’re pleased to have Glenn Haussman, editor-in-chief of Hotel Interactive join us to talk about the hospitality industry, the green initiatives within it and the next steps he sees the industry making to continue its recovery.
Glenn got into writing about the hospitality industry after being a music and entertainment writer. Unsurprisingly, he found celebrities to be disdainful and decided to move to the hospitality business because it’s the closest thing to living like a Hollywood rock star outside of Hollywood. Hard to argue when he gets to travel to some of the best locations and hotels around the country.
The Refinishing Touch: It’s been a fairly tough economy in the last few years, do you think that the industry has changed in any substantial way or has it been recovering from the downturn over the last few years?
Glenn Haussman: The hospitality industry is definitely recovering from the downturn in the sense that demand for hotel rooms is higher than it has ever been in the entire history of the hotel business. You can expect that in 2011 we’re going to sell more room nights than we’ve ever seen before. Well over 100 million room nights are going to be sold this month (August). Right now, there’s not a lot of new construction happening, so demand is beginning to outpace supply. The only thing that’s holding hotels back now is the lack of confidence in their desire to raise rates. They say they are going to but they’re not actually pushing rate.
TRT: How have rates been changing? On average have they changed up or down in the last few years?
GH: Well they were down quite considerately but now they’re inching back up. The general temperature of the industry is that ‘things are back’. Guests have changed somewhat. It’s more about personal experiences. Guests are out there trying to collect experiences no matter what the purpose of their trip is, even if it’s for business. They also want higher value in what hotels are offering. They’re not as price conscious as the general managers of hotels think they are. Meanwhile, group business travel is solidifying at the same time but a lot of those business they’re having an inability to move those rates because, in those scary days of 2009 and early 2010, deals were made that locked these people into lower prices than they could probably get now if they were negotiating contracts.
TRT: What is the mix of business travel vs. vacation, or personal travel?
GH: Even through the downturn, leisure travel remained strong. Americans feel it’s their right to vacation. But now, business travel is surging back. You have those two things working together to restore the industry.
TRT: What about oversees visitors? Do you see an increase coming to the US?
GH: Oversees visitors have been coming into America but not at a pace that Americans need. Tourism has an opportunity to be our biggest export. The average international guest stays twice as long and spends more than twice the average of what the American guest would spend. So we really want to get those international travelers coming here. But the problem is that we’re not really addressing the needs of those travelers to come here easily.
TRT: How so?
GH: Well, for example: China has got this surging middle class of hundreds of millions of people that finally have the money to start to travel. But in that massive country of over a billion people, they only have five consulates that they can go to in the entire country to try to get a visa to come here. And even then, it’s only good for a year. People are waiting to try to get permission to go on vacation. A Chinese traveler can pretty much show up in any European country and be let in without any issue, but not in the US. So the US government needs to expand their visa waiver program in order to get more folks to come here in a more streamlined manner.
TRT: We can see how that would be an issue.
GH: One of the cool things that has finally been passed during the last year is the Tourism Promotion Act and what that’s done is it’s created a public/private partnership which is being funded by fees that are being paid by travelers that are coming into the US. Those fees are then being used to create advertising to people to visit the United States. International visitors coming to the US remained stable over the last 10 years, but the actual percentages have shrunk considerably because there are so many more people now that have the financial means to travel and they’re simply not coming to the US. Pumping fees into the advertising is hopefully going to help change things
TRT: In terms of value do you think that visitors and travelers are looking at the impact of green initiatives in their hotels? Is that part of their decision making process when deciding where they’re staying?
GH: While there are plenty of people who do, I don’t think that individual travelers overall are making decisions based on that. They’re making decisions based on price and value and not whether or not something is green. It’s just I don’t think it’s something that’s consumer driven.
TRT: The fact that there’s not a lot of new building going on, does that correlate to a lot more renovation in existing hotels?
GH: Absolutely. Right now there are more renovations going on in the hotel industry than ever before. When you talk about green, the real great thing about going green is that you are able to save money and shorten ROI as opposed to buying newer products. I’ve been preaching this for like 5 years. I think everybody got caught up saying that travelers are all going be into green, but I kept saying you need to look at the bottom line. That’s where people are going to be able to make a difference. I think at some point in the future, consumers are going to have a lot more interest in green.
On Friday, we’ll present the rest of our conversation with Glenn to get his thoughts on sustainability in hospitality, more on the value guests look for and his ideas on where you’ll find the hospitality industry most committed to sustainability.