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Are business partnerships an untapped resource for unlocking new growth opportunities? Can regulation be a force for good? What impact will generative AI have? These were some of the questions raised at the 46th NYU International Hospitality Industry Investment Conference, where PwC’s Jeanelle Johnson hosted a panel exploring innovations and new spaces for expansion within the industry.
Many insiders agree that the hospitality industry is still stabilizing after years of disruption and blindsiding events. To adapt to the new landscape, business leaders are searching for ways to face near-term challenges, while capitalizing on long-term megatrends that include evolving customer preferences, labor shortages and new technology.
In the face of this complexity, the conversation is shifting to business transformation: how a company can create value and drive outcomes by making operational changes within its existing business model. Five CEOs from across the industry shared their thoughts on transforming the hospitality model to meet the future head-on. Here are the top takeaways from their discussion.
1. Pivot and adapt to drive growth
Responding to statistics from PwC’s 27th Annual Global CEO Survey, the panelists agreed that anticipated global growth over the next decade would increase competition within the industry. The solutions presented were wide-ranging, but adaptability and a willingness to pivot were the common thread.
With revenue growth expected to be flat, or less than 2% for most hotel sectors through the end of 2024, new sources of revenue are top of mind. These include strategic acquisitions of new properties to enhance existing portfolios, attracting new demographics by catering to specific needs and niches, and renovations of existing assets to better serve guests.
2. Create a unique destination experience
One trend experienced by the panel – and a talking point for the conference – is customers demanding more of the hotels they stay in. Guests seek memorable, unique, creative experiences, starting with their accommodations. Increasingly, expectations are that the hotel is a destination in itself – not just a gateway to a city or event.
Many leisure travelers place high value on food and beverage offerings, proving willing and eager to choose a hotel because of a destination restaurant, imaginative menu or atmospheric bar. "Wellness" and "lifestyle" appeal are also in demand, and not just by certain demographics. These concepts are expanding fast, the lines between them are blurred and may even cease to be distinct in the future, but the essence is this: hospitality brands should reflect their guests’ aspirational self-image.
3. Embrace tech, but keep a human touch
When choosing which tech to adopt, source opinions from staff – trust them to know how and where new technology can help guests the most. And be mindful that customers still value human interaction, particularly in hospitality. In such a people-focused business, the goal of AI should be to liberate employees, freeing them from their screens to deal with guests one-on-one.
Another area where AI presents a real opportunity is in the recording and measuring of results. Real-time, continuous data analysis can help a business judge itself objectively and continuously. Similarly, successful AI implementation can mine data to improve personalization, especially for repeat guests.
4. Don’t wait for the regulators
One clear point of consensus was that the industry can’t wait for regulators, especially when it comes to sustainability. Having already made progress in areas such as reduced water usage, increased use of renewable energy and waste reduction, hospitality companies need to keep up momentum, leading from the front to drive further change.
At municipal and state levels, the industry should engage in dialogue with regulators to overcome regulatory challenges. Staying ahead of the curve will also mean less risk, and minimal surprises.
Tech takes the spotlight
The topics covered in the panel were wide-ranging, but it will come as no surprise that technology was given the most attention, echoing PwC’s CEO Survey findings which named technological change as the top driver of transformation. And while the conversation largely focused on how AI can directly affect the guest experience through personalization, rewards and data-driven insights, there was another factor at play — the indirect benefits of improved efficiency.
In an international study, PwC estimated that up to 38% of US working hours are in scope for automation or augmentation. But many organizations are already embracing technologies that automate and streamline their most labor-intensive tasks.
Automation, the new frontier
We’ve seen firsthand how technology and automation are making a big difference on efficiency, profitability and retention for organizations in the sector.
For Mohegan, technology and automation helped drive a back-office cloud migration project to improve operations and increase scalability by combining financial, HR and payroll data onto a single Workday platform.
“We had an opportunity to communicate more effectively between the front and back of the house, which would enable real-time decision-making and help positively impact our customer experience. With Workday, we created an interoperable technology architecture that shares data seamlessly across our organization. Our team can now find answers or correct errors in near real-time. Reports that used to take eight hours to run are ready in seconds. We can lean into the benefits of artificial intelligence and machine learning to augment our work and better understand data in increasingly efficient ways. This will help us plan our global operations across properties and make strategic decisions that empower our people to better serve our customers.”
Vanesa BuiVice President of Transformation, MoheganThe panelists believe the most effective way to identify targets for tech is to listen to employees. But this in itself – particularly for large organizations – can be a challenge. For Hyatt Hotels Corporation, tech advancements were driven by its culture of care, creating an ongoing listening strategy to foster an environment where its people can thrive and make a positive impact on both the employee and guest experience.
“Survey outcomes are easily accessible within the [PwC] Listen Platform, allowing our leaders to review results and build improvement plans using custom dashboards. Leaders can also have the ability to select and measure focus areas that are most meaningful for their team. The platform’s resources help us further enhance Hyatt’s culture of care — which at its core starts with listening and empathy — as well as improve employee satisfaction and better predict future turnover using data and insights.”
Carlee WolfeAssociate Vice President, Leader Development and Organizational Effectiveness, HyattWhether it's improving processes or providing a way to maintain a dialogue with employees, there are already many tech solutions available that can help businesses transform. Our main takeaway from the panel is that it pays to be nimble. Those that adapt and modernize now will gain the advantage, with technology the means to stay ahead.
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