Hotel CEOs at the NYU International Hospitality Industry Investment Conference in New York discussed the changing landscape of the hotel industry. They noted that while leisure travel may be cooling off, there is a strong surge in demand from business travelers and groups.
Hyatt Hotels Corp. CEO Mark Hoplamazian highlighted the growth in business travel this year, with corporate accounts up 12% and the business travel segment up 6% year over year. This trend is expected to continue as business travel shows steady growth.
Marriott International CEO Anthony Capuano pointed out that groups are currently the strongest-performing segment in the industry. Group clients are looking to book years in advance to secure the dates, space, and cities they desire. Accor CEO Sebastien Bazin also discussed securing significant rate hikes during annual renegotiations with global corporate accounts.
Hilton CEO Christopher Nassetta emphasized the impact of scarce new hotel supply on pricing power. With limited new development getting funded, Nassetta predicts a historically low supply growth over the next few years, driving demand up. Capuano added that lending for new construction has decreased, leading to increased competition for conversions.
IHG Hotels & Resorts CEO Elie Maalouf mentioned the need for creativity in the industry, with some developers considering unconventional projects such as converting office buildings into hotels. While this type of conversion can be costly and challenging, the strong demand for accommodations in key locations makes it a viable option. The changing dynamics of the hotel industry present both challenges and opportunities for hoteliers to adapt and innovate in response to evolving consumer needs and market conditions.
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