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Balancing Act: Hotel Brands and Owners Grapple with Market Challenges and Relationship Dynamics – Image Credit Unsplash+
At the recent Hunter Hotel Investment Conference, a panel discussion revealed the tension between hotel brands and owners despite their shared objective of delivering a profitable guest experience. Dianna Vaughan, Senior Vice President of Global Owner Relations, Support and Benefits at Hilton, highlighted the delicate balance required in these relationships. Vaughan emphasized the importance of balancing customer expectations with owner economics, a key part of every discussion in the industry.
According to Vaughan, maintaining open lines of communication with owners and franchisees is a daily concern. The increasing difficulty of these conversations was echoed by Bobby Molinary, Chief Development Officer for U.S. Select Brands at Marriott International. Molinary stressed the challenge of demonstrating a return on investment (ROI) that includes asset improvement and excellent guest service.
The panel discussion also shed light on hotel owners’ concerns. Rinkesh Patel, President at RAM Hotels, described the relationship with brand affiliates as a give-and-take. However, the panelists voiced their concerns about the impact of the volume of brands in the market on their businesses. According to Pete Patel, founder and CEO of Nexera Capital, the sheer number of brands is heightening competition and potentially affecting the property market.
The hospitality industry also grapples with brand-loyal consumers, especially among newer generations. As a result, securing big brands for hotels can be competitive. Rinkesh Patel viewed this as more of an opportunity for growth, as more brands equate to more options.
Another significant challenge is maintaining a specific level of service to hotel guests that is on par with pre-pandemic expectations. According to Rinkesh Patel, this has been hampered by staff changes resulting from pandemic-related layoffs and rehires.
Looking at the future, hotel owners are now faced with new challenges, including tariffs promised and implemented by the current presidential administration. Pete Patel emphasized the need to budget for these potential tariffs, regardless of whether they go into effect and for how long.
In conclusion, despite the challenges, the panelists agreed on the importance of being nimble and having a contingency plan. Vaughan noted the need to be proactive and prepare for various scenarios. Molinary stressed the importance of active learning and sticking to the fundamentals, even in uncertain times.
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