Face-to-Face Meetings Likely to Decline
Source: CoStar
Corporate meetings and other forms of business travel will return at some point, but hotel CEOs are prepared for changes in that sector.
During the “CEOs’ think tank” session of the 42nd Annual New York University International Hospitality Industry Investment Conference webinar series, Jim Alderman, CEO for the Americas at Radisson Hotel Group, said Amazon saved billions on travel this year, and going forward, chief financial officers are going to question if it is worth spending $500 to fly out an employee for a 45-minute meeting.
“Unfortunately, there’s going to be some real [return on investment] put to some of these [trips], because we’ve become really good at telecommuting,” he said. “We adapted, we’ve got better cameras, we’ve got better sound, and we’re used to it.”
Face-to-face meetings will still have to happen for some departments across industries, he said. For example, franchise sales will need to happen in-person as “there are very few franchise sales that can be made without a face-to-face meeting.”
A lot of Radisson’s business relies on conversions, so teams have still been able to drive to other properties for meetings, Alderman said.
Those smaller, intimate meetings are happening and will continue, but larger meetings might take longer to bounce back, he said.
Geoff Ballotti, president and CEO of Wyndham Hotels & Resorts, said business meetings will retreat a little, but they will come back “because the pent-up demand is incredible right now.”
While business travel is changing, that doesn’t mean companies are going to send less people to big events, like the New York University conference, where deals happen, executives said.
Alderman said most of the people from Radisson who would be attending NYU are on the development side and it’s impossible to tell them no.
“If you tell them they have the option to go, they are going to be there,” he said.
Pat Pacious, president and CEO of Choice Hotels International, said the number of people going to a conference might not change, but senior team members are going to have the option to go before younger associates, which will be a challenge as large shows are where newer entrants in the industry learn the business.
Companies will have to find ways to get those younger associates to these events without breaking the budget, he said.
Long-Term Changes
Hoteliers have had to adapt and innovate to make it through this pandemic, and panelists said they expect some of those changes to stick beyond the pandemic.
Pacious said things put in place as temporary changes are going to “turn into more permanent changes just on their own.”
“It looks like we’re going to go through an entire calendar year at a minimum where every event that a company does, every event that a hotel goes through, you’re going to have done that during COVID,” he said. “We’ll eventually get a President’s Day weekend where COVID is here, and then it starts all over again.”
If hoteliers are asking themselves how they are going to get through the end of the year, “we’re going to find out in the next six, seven weeks,” Pacious added.
“As hotels go through that, as our companies go through these changes … we’re going to have to ask ourselves, ‘Are these things that we want to keep as permanent things?’ Is this going to change consumer [behavior]? Is it going to change the way [guests]experience our hotels? And I think the answer to that is yes,” he said.
Pacious added that some of these changes could get at “the core problems we’ve had in our industry, which was rising costs.”
A lot of these short-term changes could become long-term changes that reduce costs for owners, he said.
This pandemic has led to the industry adopting new technology at a more rapid pace than seen before in the past, Ballotti said.
While it has been great to see hotels’ rapid adoption of protocols to meet state and local regulations, Pacious said the margin of error on implementing these new programs is very small.
Lessons learned
When asked what the biggest lesson learned has been from having to furlough and layoff employees at the corporate level, Ballotti said the biggest takeaway has been “the inspirational efficiency of our team’s ability to bounce back from the layoffs.”
Employees have been able to manage no longer having boundaries as many people are bouncing from a Zoom call to making dinner, so Wyndham has implemented team member appreciation days once a month and recognizes the need to thank employees more often for their resiliency throughout this crisis.
Pacious said “the most difficult decision I’ve had to make was to right-size the workforce and do it during a time when you didn’t know what the future held.”
Choice had to come to a decision on what it thought 2021 was going to look like and prepare for that environment, he said.
Pacious told his associates that for every Comfort Inn kept open, that’s saving the jobs of 25 people. He said that is what has kept his people going as they work late hours and weekends throughout this crisis.
Alderman started his position as CEO of the Americas at Radisson on March 16, the same day he had to close offices in Minnesota for the company. Those offices remain closed. It is a day he will never forget.
“In a crisis, especially one of this magnitude and this duration, I’ve found that information flow has become critical,” he said, adding that Radisson has adopted new methods of connecting with team members through virtual town halls.
