Hotel execs delve into strategy pivots to adapt to changing conditions

NEW YORK — The hospitality industry must constantly contend with changing conditions, good or bad, to try to end up with the best possible results.

During a leadership panel at the NYU International Hospitality Investment Forum, hotel company executives spoke about how their respective organizations have evolved their strategies in the face of significant changes.

With consumer confidence low, hoteliers have to adapt their strategies accordingly, said Larry Cuculic, president and CEO of BWH Hotels. That can require atypical revenue management, which in this instance may mean not looking at 2025 to figure out this year. There will be things happening this year that didn’t last year, namely World Cup matches.

“We have 200-plus hotels within 25 miles of a venue, and you can’t just assume people will come,” he said. “You have the pressure of consumer confidence, but then you also have to really consider what the World Cup is all about, because it is an anomaly with regard to revenue management."

Hotel companies with a presence in the markets where the five teams favored to win are playing can probably revenue-manage a bit more aggressively, Cuculic said. Even so, the cost pressures travelers face, especially when factoring in the cost of a World Cup ticket on its own, mean hoteliers need to adapt their strategies.

BWH Hotels launched two promotions concurrently, something the company hasn’t done before, he said. One is a value play, and the other is aimed at boosting consumer confidence to gain 1,000 loyalty points for a stay with the chance for 50 people to win 250,000 points leading into the America 250 events.

“We're adapting our strategies to what we're seeing in the economy,” Cuculic said. “We're being very, very thoughtful with regard to revenue management because of what we're witnessing.”

With international tourists weighing whether to visit the U.S. for the World Cup over concerns about visas or feeling uncomfortable with what's going on in the U.S., the American Hotel & Lodging Association has been meeting with members of Congress to address these issues, Aimbridge Hospitality CEO Craig Smith said. AHLA recently held Hotels on the Hill in which they were able to speak directly with members of Congress to talk about the issues and educate them.

“It was interesting for many of them,” he said. “They didn't really realize — we spoke to them about how we talk about an export imbalance, that every time someone comes to United States, it's an export. They're using foreign capital for services in United States, and how important that was.”

He said he would encourage hoteliers nationwide to not just see the problems but try to address them both on their own and through the AHLA.

The current environment isn’t all that bad, at least not when compared to what the industry has been through since Sept. 11, said Rob Smith, president and CEO of Stonebridge Companies. Stonebridge had a strong first quarter with top line up about 6.5%. April performance softened a little because of the Easter and Passover holidays, but May looked great and June and July are going to be about the World Cup matches.

Stonebridge is in eight World Cup markets with close to 40 hotels expected to feel the impact, he said. The company made moves ahead of time to try to fill in with domestic demand what had been expected for international inbound.

“International — that cake is baked,” Rob Smith said. “If they’re not on the books today, they’re not coming. They won’t be able to get the necessary paperwork to come through.”

Stonebridge is cautiously optimistic for the year based on how FIFA comes through, “but hopefully there's not another shoe to drop,” he said.

The most exciting thing happening in the hotel industry today is artificial intelligence, Craig Smith said. Twenty-five years ago, many hoteliers were still taking reservations on a piece of paper over a phone call. Those who remember that have been through the digital transformation, which everyone at the time thought was the biggest thing to happen to the industry.

“AI is not a shiny penny,” he said. “It’s the next and much bigger thing that’s happening, and it’s going to transform the industry.”

AI will change how people search and book their trips, he said. It will change everything in the middle of a profit-and-loss statement. Accounting will become easier, and forecasting will be easier and more accurate.

Aimbridge is doing a lot of work with AI, and to accomplish that, it’s reinvesting in its systems because data is important, he said.

“You can’t do anything on the AI side unless you have all your data stored correctly in the warehouse,” he said.

Stonebridge is at the beginning of its AI journey, and it’s doing so with an in-house team, Rob Smith said. Stonebridge is able to break even with this approach, and it has been involved in AI for almost two years with its team. All of its data is stored in one space, and that includes financial reviews and different industry reports.

“I can now go into Copilot and pick out one hotel and less than 30 seconds know everything that's happening, not only that month, but the last six months, in the future six months,” he said.

Stonebridge also started a lab in November in its corporate office, he said. The company uses ChatGPT and Claude as well, but it rolled out Copilot to its property general managers, directors of sales and directors of finance.

“All the innovation doesn't happen at the corporate office,” he said. “We're not the ones that think about it. It happens in the field.”

Stonebridge instructed its hotel leadership teams to use Copilot over a six-month period and then report back what they used it for, he said. Corporate then takes that information back to the lab to examine it.

People tend to portray AI as something to fear or a challenge because it means they have to change, said Satya Anand, group president of U.S., Canada, and the Caribbean and Latin America for Marriott International. It is a challenge, but it’s also a large opportunity.

On the customer side, AI will bring about the fastest changes, he said. In response, Marriott is introducing technology to make it easier for guests to use and search. In regard to the customer journey and personalization, AI will allow Marriott to accomplish this in a better scale and deeper content level.

Anand agreed that there are great ideas coming out of the field from Marriott's hotel associates. Marriott has used an incubator for AI to solicit ideas from property teams and combined that with what they are working on in corporate offices.

One example is on the revenue management and sales side, he said. Hotels can take in large numbers of group business leads, and that can take a significant amount of time for the respective teams to go through them and respond.

“Many of the times, the smaller group leads depend on how quickly you respond, and the faster you respond, the greater the chance of you getting the business,” Anand said. “Now, it’s a manual process, a difficult process. We are using agentic AI to be able to filter those leads and respond at a much faster pace.”

Cuculic said he likes the concept of experience management software having AI. It’s not just for what guests are saying about a hotel but what hotel teams need to do and provide advice to the general manager.

For example, it can tell a team to respond to an issue in a specific room because guests have complained multiple times about the HVAC system, he said.

“It’s an integration through the use of AI of all the data that you have,” Cuculic said.

Hoteliers should also be able to turn to AI to make sure their websites turn up in search results when guests use AI to plan a trip, he said.

“You've got to use AI to curate content and then make sure that your hotels are going to be the answer to the question,” Cuculic said.

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