NEW YORK — In an era of creeping costs and shrinking profits, the various stakeholders across the hotel industry need to do a better job aligning their interests, said a panel of experts speaking at the 2025 NYU International Hospitality Investment Forum.
The top thing any hotel company can do in a period of uncertainty like the current environment is control their own costs and continue to find ways to drive demand, said Remington Hospitality CEO Ben Perelmuter.
"It goes back to the basics, really," he said. "Control what you can control on the revenue side. Yeah, we know there's some government lag out there, but it's still very much a ground game. So you use technology to point and shoot, and then you get on the ground and you go and look at small businesses and try and find some of the segments to offset the larger macro issues that are out there."
He added planning is the key to scaling back costs.
"We have several iterations of mitigation plans," Perelmuter said. "You get people in a war room, and you bring all the disciplines in. You write a level one, two and three and and go out and execute. It's really just about rolling up sleeves and looking at doing things a little bit differently."
Nelson Knight, president of real estate and investments for Apple Hospitality REIT, said his company — which primarily owns select-service hotels — works with 16 different operators, and Apple REIT executives have found they can better control labor costs in particular among companies with a strong culture.
"The management companies that have strong culture retain their talent, which helps reduce overall cost of labor and produces better results for our guests in the hotels because there's pride of ownership," he said. "It ends up being a better result for everyone."
Apple REIT also has a somewhat unique structure to its management contracts that allows management companies to boost their fees based on quarterly performance and guest satisfaction, Knight said.
"From our perspective, we're one step removed from management, so [it's about] how can we encourage management companies to focus on things that matter the most," he said.
PM Hotel Group President Joseph Bojanowski said while the labor environment has improved somewhat from the depths of recent years, it still remains somewhat of a challenge. Bojanowski added he's encouraged by the decreasing use of contract labor, which he described as "super inefficient."
Perhaps the most encouraging trend is an uptick in technology to streamline operations, and Bojanowski added it's a win for hotel operators "whenever we can use technology to move highly transactional components of our business into an app or something else wherever we have highly repetitive tasks."
Brands' adoptions of mobile check-in and giving guests the option to opt out of daily housekeeping on an app helps, but it's not the full solution to controlling costs.
"There's no silver bullet because it's everywhere," he said. "Then how do you compensate for insurance costs that have gone up by 40%, right? It's tough."
Aimbridge Hospitality CEO Craig Smith said the hospitality industry as a whole needs to work together better to tackle the major issues it faces and leverage the joint resources that are out there to address issues such as labor shortages.
"We really need to get behind" the American Hotel & Lodging Association, he said. "Their apprenticeship program is phenomenal."
Smith said the hotel industry can present a realistic career pathway to young people if they're made aware of it.
"A lot of these kids can come in and do these apprenticeship programs and graduate with a degree at the same time to really come in and train into our industry," Smith said.
From the AHLA perspective, President and CEO Rosanna Maietta said her organization continues to push for tax reform and against increased labor costs. She added there's still opportunity for some federal immigration relief to help with staffing.
"One area we're still advocating very hard for is H-2B visas and J-1s, particularly around the upcoming seasonal period," she said. "Those are hard to come by. We've already hit the cap for this year at 66,000 open to all industries, and we fight really hard to get our fair share of those."