NEW YORK—Looking into 2013, most of the uncertainty that recently clouded the industry is fading away.
While there is still some doubt brought on by issues such as the U.S. debt ceiling, things are generally looking positive for the industry, said Adam Weissenberg, vice chairman and global leader of the travel, hospitality and leisure segment at Deloitte.
However, hoteliers should remember that “the industry just kind of rises in cycles,” Weissenberg said.
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Adam Weissenberg Deloitte |
To be sustainable in the long term, companies have to compare the way they are set up now to what they are trying to do, he said.
Improving cost structure
Many hotel companies do a good job analyzing their budgets each year, allocating costs and ensuring they are as profitable as they can be, Weissenberg said.
“To some extent, there was some successful cost cutting (during the downturn),” he said, “but I still think there’s opportunities (to cut costs further).”
Weissenberg said companies should look at how they are supporting their regional offices. “There are ways to look at that and figure out ways to cut costs.”
There are also ways to reduce energy costs and to reevaluate outsourcing strategies, he said.
The main takeaway when it comes to cost structure is that the majority of what hoteliers spend should be in customer-facing activities, Weissenberg said.
Building customer loyalty
Building long-term relationships with clients is crucial to maintaining a sustainable business in a cyclical industry, Weissenberg said.
“Hotels have so much data about people, they just don’t know how to use it,” he said. Keeping track of specific things, such as what guests order from room service or if they go down for breakfast, can be helpful down the road.
Using technology to learn more about the guest is how hoteliers should build brand loyalty, Weissenberg said. “Loyalty needs to be created by personal, unique experiences to each guest.”
There is a need for that in the market, he said. “Clearly the loyalty programs that are in place now are not doing that,” he said. “They’re used as shopping tools. They’re just another way for people to comparison shop.”
Weissenberg pointed out that this isn’t so much a case of value. It’s more about customers wanting to feel important. “They want to feel someone is paying attention to them,” he said.
The millennial travelers who are hitting the road more frequently are not saying, “Find me the best price,” Weissenberg said. “They’re saying, ‘Give me the hotel that gives me the most experience.’”
Training of hotel personnel also is important to build customer loyalty, he said. It goes a long way when employees remember small details about guests.
Establishing a footprint overseas
Realizing the growth potential of new markets and market opportunities continues to be the top priority in the hotel industry, Weissenberg said.
Despite the difficulties that surround developing in countries such as Brazil and China, with travelers in these markets becoming major sources of demand, building abroad is a way to establish a sustainable hotel business in the long term, he said.
And, “you can’t forget about Europe. Europe’s a huge market still,” Weissenberg said. “Clearly there’s been some fall off, but overall the number of people traveling to Europe from the U.S. (is great).”
There are plenty of opportunities to grow within the U.S., but when thinking about long-term growth, there are even bigger opportunities overseas, he said.