Choice Hotels CEO Has Choice Words for Expedia, Orbitz
Choice Hotels CEO Steve Joyce has some choice words for online travel agents like Expedia and Orbitz: “They own nothing and they do nothing.”
On Monday, Steve spoke at our national hotel conference, BLIS, at the Rennaisance DC Downtown (owned by Marriott) where he said the hospitality industry as a whole “has done a poor job of defending ourselves against OTAs.” It’s that type of candor that made his chat, right after lunch, a highlight of the daylong conference.
Steve was hired by Choice as CEO in 2008 and immediately invested millions of dollars into hotel development. Poor timing, to say the least. After years of losses, the hotel business is booming, with RevPAR gains every year with demand outstripping supply.
“If you’re not having fun now,” Steve says, “get out of the business, because you’re never going to have fun.” Steve is having fun, especially with his newest brand, Cambria Suites. By next spring, there will be close to 20 under construction, after which Choice plans to start building another 40. One key for Cambria and other Choice brands: urban markets, where every Cambria is located and where Steve sees huge unmet demand.
While Cambria is the brand aimed at Millennials, Baby Boomers figure to be key to Choice’s future with its traditional brands, like Comfort, Sleep and Quality Inns. “We think we’re going to get a huge push from people on their own dime,” Steve says. “Boomers are going to be huge for us [when they retire and travel]. If people are spending their own money, we are the top of the list.”
There were nods of affirmation in the crowd, which was filled with Boomers, albeit as-yet-unretired ones. These Boomers enjoyed our post-BLIS cocktail party, and they all were checking their phones in the moments they weren’t networking with one another. That’s the future of hotel booking, Steve says. “Over half of our business is already mobile,” he says. “Three or four years from now it’s going to be all mobile. The way to be competitive is to be better than anyone else at it, make sure your app is the easiest to use.”
Steve touched on some of the most important themes in the modern industry—OTAs, Millennials, mobile and unions—but we had an entire panel devoted to what almost every speaker said is the most important part of any hospitality business: culture.
CohnReznick's Dana English moderated the panel of Real Hospitality Group founder Ben Seidel, Kimpton Hotels CEO Mike DeFrino, chairman and CEO of Trust Hospitality Richard Millard and RD Jones SVP Jennifer Farris. Mike says consistency and attention to detail are key for building culture. “Every little thing is watched and indicative of the strength of your culture,” he says. “I really think you can’t take little motions or movements in your organization for granted.”
Richard, whose company manages dozens of independent hotels globally, says he sends staff to sit down and chat with employees of his hotels. By having in-person conversations, instead of impersonal questionnaires, the culture permeates throughout the company. “We’re in the hospitality business, this is supposed to be a fun thing,” he says. “We’re supposed to be looking at the people who work in our hotels and making sure that they’re having a good time.”
There was also a development and design panel and the key trend was change. Millennials don’t have loyalty anymore, according to our panel, which included Gatehouse Capital's Marty Collins, Cooper Carry's Rob Uhrin, Paladino's Rachel Sowards, Locke Lord's Mitchell Bell, who moderated, Hersha Hospitality Management's Naveen Kakarla and HVS's Suzanne Mellen.
That’s creating opportunities for brands to innovate more. “We have a lot more cool, hip things to put on the soft brand side,” Rob says. There are dual-branded hotels, limited-service hotels with restaurants and meeting space, two trends that would have been unheard of 10 or 20 years ago.
“Every single one of these soft brands," Suzanne says, "when we called and ask what they want, they said ‘whatever works.’”