Hotel CEOs on the future of travel and managing guest expectations

The CEOs of five of the largest hotel chains in the world all say they're optimistic about the future of travel, with most projecting that 2022 is going to be a great year.

In fact, Keith Barr, CEO of IHG, said that’s he’s expecting a “record [spring and summer] for the U.S. industry” next year. David Kong, CEO of Best Western Hotels and Resorts, echoed the sentiment, stating that with advances in vaccines and new COVID-19 treatments, “next year is going to be a banner year.”

The CEOs were gathered at a panel discussion at the annual NYU International Hospitality Industry Investment Conference at the New York Marriott Marquis in Manhattan.

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For the U.S., at least, the hotel and hospitality industry seems to have mostly moved out of “survival mode” and into “recovery mode,” the panel suggested. And the needs of travelers have changed — as have the ways hotels operate.

Managing guest expectations

One major trend that emerged during the conversation was the necessity to balance the needs and expectations of guests with what hotels are currently able to offer due to changes caused by the COVID-19 pandemic and ongoing staffing and supply issues.

As travel started to reopen during the pandemic, guests were generally understanding of how hotels were forced to change — and were even forgiving, said Hilton president and CEO, Christopher Nassetta. But now, as core travelers or “road warriors,” he said, have started to return, that forgiveness is waning.

Especially when factoring in the fact that hotel prices have continued to rise.

“We all changed a lot during COVID, but they still have very high expectations of what they want us to deliver,” Nassetta said. “And as prices continue to go up because of inflationary pressures … it just exacerbates the problem where you're still trying to get labor and bring back all of the services that were suspended in an environment where your customer expectations are high and getting higher because you're charging them a lot.”

According to Nassetta, finding the right balance is “singularly the biggest issue that we have to deal with.”

The customer has to be 'retrained'

Many things we’re used to seeing in hotels have evolved or changed due to the pandemic. For example, many hotels have permanently replaced room service menus and other paper products with QR codes that can be scanned by guests. Other services, like housekeeping, have also been drastically reduced, with many hotels only offering “light” daily services or room cleanings every other day.

The reality is that many of the changes caused by the pandemic and the labor shortage are here to stay. Combine that with new or enhanced sustainability efforts, and guests are encountering a very different hotel experience.

“We have to communicate, and retrain customers,” said Nassetta. And housekeeping is one of the main areas where hotels need to help guests prepare for changes, he said, adding that it will be “quite [different] than it's historically been done.”

Sustainability is serious business

While the pandemic and staffing shortages have certainly caused a lot of headaches for travelers in many ways, the effects of the two have seemingly helped put sustainability front and center.

For the CEOs on the panel, implementing changes now to help lower travelers’ carbon footprints is another opportunity to help them “relearn” how hotels operate.

“We're going to have to, as an industry, guide the customer,” said Nassetta. “We're doing it with amenities, we’re doing it with plastics, we're doing it with energy use in a lot of different areas.”

As for plastic amenities like bottled soaps, shampoos and conditioners, the end might finally be in sight. “Grab those little bottles while you can,” said Barr, who thinks they’ll be gone by the end of next year.

Another area for improvement is food and beverage operations, including wasteful buffets. Some hotels, for example, are investing in new technology that can track what foods are popular and what’s being thrown out to help inform the kitchen to make smarter choices. Other brands are narrowing menu options, focusing on foods that are less wasteful but still excite customers.

Though not every brand is treating sustainability the same way, the CEOs all agreed that focusing on the environment and sustainability is an opportunity to set new standards that can positively impact the planet.

“I think to a degree, this is [an] area that we all can work together to help lead down a path to a better outcome for the environment that customers will adopt and will appreciate,” said Nassetta.

Bottom line

At the end of the day, the major hotel CEOS seem confident that the future of the hospitality industry is bright. As we hopefully continue to move away from the pandemic, it’s clear that people are excited to travel again — and 2022 seems to be looking up.

The challenge is for hotel brands to help guests understand that hotels are evolving, whether people like it or not. Therefore, expectations will also have to change. And whether that’s due to the pandemic, staffing shortages, a real push for sustainability or maybe just to cushion the books, it’s the new reality for hotel stays.

So, the next time you check in to a hotel, grab the mini amenity bottles while you can, because your guest room might run out soon.