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New coalition to fight for gender equality in hospitality

Hospitality leaders across the globe have come together to form LeadingHôtelières, a coalition working to achieve better representation for women at the highest levels.

Formed by some of the world’s top hoteliers and hospitality academics, this pioneering initiative is calling for gender equality across senior positions, in line with the UN’s Sustainable Development Goal 5.

Uniting industry leaders in a common goal

The LeadingHôtelières coalition has been founded by the CEO and president of HoteliersGuild, Frank M Pfaller, and co-founded by the CEO of Preferred Hotels & Resorts, Lindsey Ueberroth. Considerate Group’s Xenia zu Hohenlohe is leading the coalition as chairwoman in its inaugural year, and the associate professor of management at EHL, Dr Sowon Kim, is joining as co-chair.

“When we looked at our HG membership roster, we realised that we had far too few women in leadership positions,” said Pfaller. “Reaching out initially to Lindsey, Xenia and Sowon, we were thrilled to realise their enthusiasm to join our cause to making a real change.”

Additional support is being provided by industry leaders like the owner and CEO of Grand Hotel Tremezzo, Valentina de Santis; sustainability architect Yasmine Mahmoudieh; the director of Red Carnation Hotels, Vicki Tollman; the director of spa at Four Seasons Hong Kong, Dr Tania Bardhan; and the CEO of hospitality consultancy WE(i) Think, Celine Vadam. Each will play an important role in establishing greater gender balance at a systemic level. The group’s communication is to be coordinated by the managing director of Mason Rose, Maria Pajares.

An advisory board is now taking shape, with founder of ESPA International, Sue Harmsworth; associate professor at Institut Paul Bocuse, Dr Henri Kuokkanen; and professor at IUBH University of Applied Sciences, Dr Willy Legrand onboard to offer support.

Working towards gender balance

Together, these figures are setting plans in motion to encourage gender equality across the industry by providing guidance, mentorship and training through its network of industry contacts.

The focus for the coming year is on addressing flexible working structures. “I’m happy to see more women CEOs in hospitality, but we are still a far cry from where I hope we can be in terms of representation,” said Ueberroth. “The biggest challenges for women looking to achieve top leadership roles were the need to travel, relocate and dedicate long hours.

“In the past, once having children and raising a family came into the equation, many women were forced to make a choice, and those challenges were hard to overcome. Given the innovations in technology and a more open attitude towards flexible working hours and home offices, many of these hurdles seem alleviated.”

“We are currently working on a framework to test whether the outcome of our goal, to improve gender equality among directorial and operational roles in the hospitality industry through updated flexible working schemes, actually works for our hotelier partners,” added Dr Sowon Kim, who is heading up research for the initiative. “We aim to create new and relevant knowledge and share these findings in a meaningful, productive way.”

Xenia zu Hohenlohe concluded: “Gender equality is a key part of the UN’s Agenda 2030 for Sustainable Development and any business serious about futureproofing itself will need to address this issue.

“We have an incredible collection of women with highly professional profiles paired with great brainpower in this group, all driven by the motivation to ensure the female hotelier of the future will be able to finally have the same opportunities for career development as their male peers. I am delighted to be co-chairing this chapter with the wonderful Sowon Kim and we hope to be able to make a real difference with this work.”

Source: https://tophotel.news/new-coalition-to-fight-for-gender-equality-in-hospitality/

New CEO for Institute of Hospitality

The Institute of Hospitality, the professional body for current and aspiring managers working in hospitality, has appointed Robert Richardson as CEO.

Robert Richardson is to become CEO of the organisation as of 19 April 2021, succeeding Peter Ducker, who spent eight years in the role.  

A new chapter for the Institute of Hospitality

  Now taking the helm of this international professional body, Richardson will endeavour to build on Ducker’s legacy. Richardson was previously general manager of Cave Hotel in Kent and, prior to that, held the same post at The Grand in Folkestone, and was an active member of the institute’s advisory board.   The new CEO received the Institute of Hospitality Judges’ Award in 2018 for his commitment to the professional body, before in September 2020 being named Institute of Hospitality vice-chairman.  

Leading the industry forward

  In this influential role, Richardson will work closely with the Institute of Hospitality chair, Kellie Rixon, to lead the body in a post-pandemic world and help realise its aspiration to achieve chartered status.   “We could not be more thrilled to welcome Robert as our new CEO,” said Rixon. “We know he brings with him not only a wealth of hospitality industry experience and connections, but the respect of his peers in education and the wider community where he has dedicated so much of his time to raising the standards and stature of our amazing profession.”   “As hospitality returns to the forefront of our economy and our daily lives after a year of unprecedented disruption and challenge, there has never been a more important time for our industry to cultivate strong leadership and management skills,” added Richardson. “We also need to attract and inspire future generations of talent, and I believe the IoH is perfectly placed to help support this. It is a huge honour to step up and lead our institute moving forward into a brave new post-lockdown world.”

Source: https://tophotel.news/new-ceo-for-institute-of-hospitality/

Marriott Execs: Don’t Expect More Hotel Mega-Mergers Even in Covid Times

Major hotel companies are massive enough. Mergers and acquisitions departments need to think more about smaller, strategic deals rather than mega-takeovers that take tens of billions of dollars and years to integrate companies.

The airline industry’s last two decades of consolidation are no longer the blueprint analysts once saw as a foregone conclusion for hotel companies.

Hotel industry analysts expected massive rounds of industry consolidation due to the pandemic. Instead, hotel companies have focused more on conversions — deals centered around organic growth that involves the owner of an existing hotel to take on a new brand affiliation.

While mergers and acquisitions aren’t entirely off the table, Marriott leaders don’t expect a repeat performance of its $13 billion Starwood Hotels & Resorts takeover in the future.

“First of all, you need a big checkbook to get one done,” Timothy Grisius, the global mergers and acquisitions and real estate officer at Marriott International, said Monday at a reporter breakfast at the 2021 Americas Lodging Investment Summit in Los Angeles. “I think people are trying to keep their house in order today and make sure that they act in a financially disciplined way. There’s not a lot of need to grow even larger for a company like us. We do that organically and don’t necessarily need to buy additional brands.”

Hotel companies may analyze and pursue larger mergers and acquisitions, but there likely won’t be much traction, Grisius added.

The consolidation, or lack thereof, forecast comes amid a faster-than-expected recovery in the leisure sector. At the worst point of the pandemic, rumors revived about a potential Accor-IHG pairing as well as predictions smaller players like Wyndham Hotels & Resorts, Choice Hotels, and Extended Stay America were low-hanging fruit for global giants like Marriott and Hilton.

While Extended Stay America traded during the pandemic, its $6 billion joint takeover came from investment groups Blackstone and Starwood Capital rather than a competing hotel company.

“I think the biggest thing right now is the difference between buyer expectations and sellers,” said Leeny Oberg, Marriott’s chief financial officer. “You’ve got the reality that, depending on what kind of player you’re talking about, the bigger ones would be looking for kind of one-offs that can fill in a hole rather than needing to go and do very large kind of transformational deals.”

The buyer-seller price expectation disparity, along with various rounds of federal pandemic relief, played a major part in why there hasn’t been a massive wave of hotel transactions so far.

But smaller, regional acquisitions could complement organic brand growth. Accor has generally followed this trend in beefing up its U.S. footprint, adding brands like 21c Museum Hotels and SBE in recent years.

Smaller brands might get dissuaded from the hefty costs required to invest in technology infrastructure. That could be an added incentive that eventually drives some smaller, regional brands to consider a sale, Marriott CEO Anthony Capuano said.

Marriott already follows the trend. AC Hotels was concentrated in Spain when Marriott first partnered with the brand in 2011. Acquiring South Africa-based Protea Hotels in 2014 gave the company a significant presence in sub-Saharan Africa.

“You may see some of these smaller transactions that follow a pattern where we have a small regional player that allowed us to get a footprint in a market where we struggled to grow,” Capuano said.

But the industry shouldn’t necessarily gear up for a major wave of these deals, either.

“I think you’ll see some of that, but Leeny’s point about the gap between the bid and the ask may mute the volume of transactions,” Capuano added.

Source: https://skift.com/2021/07/27/marriott-execs-dont-expect-more-hotel-mega-mergers-even-in-covid-times/

Scrap the front desk – Can hotels operate without a physical front desk?

The front desk: the emblem of hospitality. For years and years, we have been walking into a hotel to greet smiling faces behind the familiar desk. However, as technology evolves and continues to transform the hospitality industry, does the front desk continue to be a symbol of care and luxury, or is it transforming into a beacon of tedious outdated processes?

Many industries have already scrapped their version of ‘front-desks’ in favour of more modern and tech-based approaches. The airline industry, for instance, has widely adopted self-service check-in technology. Similarly, movie theatres are also opting to use technology to allow patrons to jump straight into the cinematic experience. Mobile banking began taking over transactions carried out by tellers as far back as 2007.

Recently, Amazon launched ‘just walk out’ shops where shoppers can simply scan a code on their Amazon app, shop, and simply walk out with the groceries. A combination of sensors, cameras and AI handles the hassle of checking out items, scratching billing desks off the books.

So, why is the hospitality industry defying all trends and hanging on to a physical front desk? A well-tailored change along with adopting the right tech solutions can ensure that the guests enjoy the true highlights of their journey without wasting their time on formalities and due process. Scrapping the ancient and rigid front desk can benefit hoteliers in more ways than one.

Tailored Freedom

A looming front desk by the hotel door is not always a welcoming sight, especially for worn-out guests arriving after a long flight, or the guests who want a speedy check-out to rush to a family emergency. A physical front desk freezes check-in and check-out processes to the spot, and this rigidity can backfire when trying to cater to the unique requirements of each guest.

Research into customer sentiments proves that guests value convenience in front desk operations. A study by Opinion Research Corporation (ORC) revealed that 76% of guests believe that being able to check-in ahead of time would minimise potential frustration and 41% stated that they would be more likely to select a hotel that offers the convenience of advanced check-in via web or mobile device.

Without a front desk standing in the way, hoteliers can adjust processes to tailor to each guest. It can also allow the staff more opportunities to interact with the guests as they no longer have to stare at a screen punching in guest data.

Smarter and Safer

Amongst the countless changes brought in by the pandemic are the social distancing requirements and the need to reduce touchpoints. The traditional front desk may very well be a hub for contamination as every single guest encounters it. Not to mention the heightened risk to the front desk staff, since, while a guest may only interact with the desk once or twice during their journey, the staff will encounter several such contacts within the day, exponentially multiplying the risk.

However, McKinsey suggests that this is an opportunity to “make it better, not just safer”. They identified that many hotels are doing away with the antiquated check-in process, allowing guests to go directly to their rooms with keyless entry. The calls for reducing touchpoints can be used as an opportunity to adopt a tech-based approach to replace the physical front desk.

Allow Choice

This does not go to say that hotels need to scrap human interactions. The increasing use of tech from airports to vending machines means that some guests might be desperate for a friendly chat with a human. The pitfall of the world’s first robot hotel, the Henn-na Hotel in Japan, is an excellent example of the need for a balance. The inability of the robots to accommodate the nuances in guest behaviour and the breakdowns forced the hotel to remove 243 of its android staff.

The need to scrap the physical front desk is because it creates a barrier between the guests and the staff. Often, these large desks are a way of masking large computers hosting cumbersome tech ‘solutions’. Front desk operations are key points in creating a positive impression on the guest and forcing them through rigid archaic processes will be of little benefit to hoteliers. Adopting simple tech solutions that can run with minimal hardware not only declutters the lobby but, will also create more space for guest engagement.

Instead of a physical front desk, hoteliers can get creative with these processes. Tech-savvy guests can pre-check in and walk straight to their rooms. Others can walk into a cosy lobby where the hotel staff can sit with them and complete the check-in process through a tablet-based solution, while the guests sip on their welcome drinks. This provides an opportunity for hospitality organisations to maintain quality human interactions. Self-check-in kiosks can be used to eliminate waiting times in busier hotels.

41% of persons use a smartphone a few times every hour (Forbes), and 76% of travellers say their smartphone is the most important travel companion (Openkey). These tech-savvy guests are quite familiar with mobile and social media apps and emails. Imagine the impression an archaic desk with people punching data into a large computer will leave on such guests.

Incorporating mobile technology can achieve safer and smarter operations as opposed to a physical front desk. For instance, FX GeM, a contactless mobile solution designed by IDS Next, allows guests to check-in through their own devices with facilities to upload identity documents.

Also, IDS offers FX Mobile Check-In, a tablet-based solution to check-in guests, generate bills, and handle check-outs on the go. FX Roomate, an innovative in-room solution for guests to easily make room service and other requests, eliminates the need for a dedicated physical desk to accommodate guest requests.

Hoteliers today want to change to the future. However, technology vendors stand as a barrier. Your current technology vendor might not allow you to make a change even if you wanted to. That’s why it is important to partner with futuristic companies with mobile-first solutions.

Source: https://www.hospitalitynet.org/opinion/4105396.html

Reintroducing Costly Hotel Brand Standards Threaten Owners Just Getting a Taste of Recovery

The U.S. hotel industry, buoyed by summer leisure travel, exceeded expectations in recent months and even surpassed pre-pandemic performance levels last week. But if another aspect of hotel operations quickly snaps back to normal, hotel owners could be in trouble.

Most hotel companies relaxed brand standards, which range from what kind of cereal to serve at a continental breakfast buffet all the way up to costly renovations of guest rooms and public spaces, during the pandemic as a way to help owners save money during a long stretch of minimal demand.

Should the U.S. hotel recovery momentum continue into the fall, enforcing brand standards are likely back on the table. That could spur a wave of long-awaited hotel property sales.

“It might be the looming capital expenditures and property improvement plans and lack of cash that might cause the capitulation,” said Alan Benjamin, founder and president of hotel furniture and equipment procurement firm Benjamin West.

The combination of more than a year of deferred maintenance and renovations combined with hotel companies looking to avoid bad reviews from travelers coming out of the pandemic will push capital expenditures to all-time highs between 2022 and 2024, West estimates.

The overwhelming demand stems from both hotels that put off these costs during the pandemic as well as from normal maintenance and renovation schedules from hotels that opened or were previously renovated in the last seven years. But some owners may not be able to afford to stick around long enough to go through a renovation cycle.

Hotel owners are typically expected to have cash reserves of 4 to 5 percent of gross revenue readily available for capital expenditures to keep up with brand standards. But owners got permission to tap into these reserves to stay afloat through the pandemic.

“For the first time ever, the lenders greenlit taking that money to hang on to control the asset,” Benjamin said.

Many analysts doubt these reserves have been restored over the last few months, especially in hotels outside leisure markets still struggling to recover. Revenue at U.S. urban hotels in May was still down 52 percent from the same month in 2019, the American Hotel & Lodging Association reported this week.

Eager investors have been salivating over pandemic-related opportunities and bargains to emerge from the hospitality sector, given its outsized impact from the health crisis. While some owners may not discount the pricing of their hotel, many could decide to sell instead of pump money into an asset after a year of tanked revenue and an uncertain recovery trajectory in the years ahead.

A Long-Simmering Debate

Owners and investors have decried brand standards for years over their perceived excessive costs and limited return on investment.

Starwood Capital spent $250 million on property improvement plans on a portfolio, and the investment firm’s CEO, Barry Sternlicht, claimed last year at the Saudi Arabian Ministry of Tourism’s Future Hospitality Summit the company didn’t gain any market share following the investment.

“If you own a Courtyard and it is number one in its [competitive] set, they’ll ask you to spend $7 million when it rebrands, and none of that money has been worthwhile,” he added. “It’s like throwing money in the ocean.”

Sternlicht and Starwood Capital are more in the camp of buy mode, but analysts think other owners could be in a more vulnerable position.

“Brand standard upgrades and renovations can either crush a hotel or help reposition it into a more desirable market ‘sweet spot,’” said Chekitan Dev, the Singapore Tourism Distinguished Professor at Cornell University and an expert on hospitality branding. “Bringing back a full set of pre-pandemic standards is going to be a hard sell for brands and a hard slog for owners who are trying to recover lost profits.”

There was already a pre-pandemic tension around brand standards issued from hotel companies to the owners responsible for paying for them. The brands want to add enhanced amenities and design with the hope more customers will choose their property instead of a competitor’s. Owners are typically more focused on reducing costs to boost profit.

Both stances are likely to continue during the pandemic recovery. Brands are likely to do what they can to differentiate a property in a more competitive market with limited travel demand — like urban markets the rely more on business travel — while owners will want to find efficiencies to save money.

Dev sees four options for hotel owners: revert to pre-pandemic brand standards, convert to a different brand with different standards, debrand entirely and become an independent hotel, or sell.

“Ultimately, the decision will be driven by a multitude of factors including the renovation cost per key vis a vis the ability to raise rate, the owner’s bargaining position with the brand, the brand’s desirability, the availability of alternate brands, the owner’s marketing and operating expertise, the availability of third-party management companies, the location of the hotel, and buyers for the hotel,” he added.

Solutions Beyond a Sale

Not every hotel owner necessarily needs to panic about a quick revert to the way things used to be with brand standards.

Hotel executives indicated in recent months there are at least some conversations around how to reintroduce these measures without breaking the bank for owners only just beginning to see occupancy rates on the rise.

“We are currently assessing post-COVID renovation of brand standards with a view toward finding more ways to improve hotel profitability while preserving the quality and experiences guests expect of our brands when they stay with us,” Leeny Oberg, chief financial officer at Marriott, said on the company’s first quarter earnings call before later adding: “We’ve got to make sure that we’re taking into consideration the dramatically lower cash reserves that the hotel owners have and picking our spots and making sure that we’re picking the renovation work that is critical to the customer experience.”

While she didn’t provide specifics, Oberg noted she expected the company to have a finalized approach on brand standards sometime next year.

For owners that are expected to snap back into costly renovations, there are other options. The Curator Hotel & Resort Collection launched last year aimed at appealing to hotel owners wanting a bit more autonomy than they would have associating with a bigger brand, including around brand standards.

Global hotel companies would be wise to note they aren’t the only option for owners coming out of the pandemic.

“Many brands permitted hotels to gut brand standard to help the hotels stay alive. The consequence of this is hotels that have learned to operate with a lot less and differently than they did before the pandemic,” Dev said. “To preserve the brand-hotel relationship, and to bring back the standards that define the brands’ reason for being, brands must draw on learnings from the pandemic and be creative to help hotels meet their standards.”

Source: https://skift.com/2021/07/09/reintroducing-costly-hotel-brand-standards-threaten-owners-just-getting-a-taste-of-recovery/

Airbnb Joins US Travel And Tourism Advisory Board

Since our founding, Airbnb has enabled home sharing at a global scale and helped create a new category of travel. As pandemic restrictions gradually lift and travel restarts, Airbnb’s global community provides a front-row seat to the shifting travel trends and how these can benefit communities. Our Hosts and business are intertwined with these communities, and we are focused on helping them thrive.

As part of this commitment, Airbnb is proud to announce co-founder and CEO Brian Chesky has been appointed to the United States Travel and Tourism Board (TTAB), which advises the US Secretary of Commerce on government policies and programs that affect the US travel and tourism industry. Board members offer insights on current and emerging issues and provide a forum for discussing and proposing solutions to industry-related challenges. As the Department of Commerce works to reinvigorate travel in the United States, Airbnb has a unique vantage point and deep insights into what travel looks like today and how policies can continue to evolve to adapt to changing trends and behaviors. Being asked to join this advisory board is part of Airbnb’s ongoing efforts to support travel and the communities that rely on it. With Hosts on Airbnb keeping up to 97 percent of what they charge and 47 percent of guest spending occurring in the neighborhoods where they stay, Airbnb helps support local economies, small businesses and communities. A recent Oxford Economics study found that in 2019, in 30 destinations studied – including Los Angeles and New York – Airbnb supported over 300,000 jobs, including tens of thousands of jobs in industries like restaurants and retail that have been hit hard by the pandemic. Airbnb guests supported more than 100,000 restaurant industry jobs, nearly 95,000 retail jobs, nearly 50,000 transportation jobs, and more than 40,000 entertainment jobs.

As the country plans for the months and years ahead, we believe Hosts on Airbnb can play an important role in supporting the US travel and tourism industry, and Airbnb stands ready to work with them to make that a reality.

About Airbnb

Airbnb was born in 2007 when two Hosts welcomed three guests to their San Francisco home, and has since grown to 4 million Hosts who have welcomed more than 900 million guest arrivals in almost every country across the globe. Every day, Hosts offer one-of-a-kind stays and unique Experiences that make it possible for guests to experience the world in a more authentic, connected way.

Source:https://www.hospitalitynet.org/news/4105367.html

Gender Diversity At The Top Of The Ladder: Will Hope Become Reality?

Universities are educating more and more women

Education is a major factor enhancing development and quality of life. As highlighted by the United Nations, it has become a priority in international development goals. In recent decades, the share of young adults (25-34 year-olds) reaching tertiary education [1] across all OECD countries increased to 44%, which is significantly higher than the 27% for their 55-64 year-old counterparts (OECD, 2019). In Switzerland, 53% of young adults had a college degree in 2019, while this figure was as low as 26% in 2000. In an increasingly competitive world, education works as one of the main signaling systems for individuals (if you manage to get a high enough GPA from a respected university, you are signaling to future employers that you might have some valuable skills). Yet education remains flush with inequity, and the increase in educational attainment is more pronounced for certain categories of the population.

For example, did you know that in almost all OECD countries, more women attend college than men? If you’ve had the chance to visit a university campus recently, you might have noticed. A concrete example is EHL, one of the leading hospitality management schools in the world based in Switzerland, where 59% of bachelor students are women. This figure is in line with recent OECD data showing that 57% of young adults with a university degree are women, versus 51% for 55-64 year-olds (OECD 2019, Education at a Glance Database).

Many female college grads don’t make it to the top of the ladder

Overall, statistics show that universities are educating more and more women, with most majoring in business administration studies [2]. Logically, the proportion of women in top management positions – especially finance-related ones – should reflect this general trend … but this is where the figures don’t exactly add up.

In the European Union in 2019, women accounted for 28% of publicly-listed companies’ board members and only 18% of executives, versus 15% and 10% in 2012 (Eurostat, 2019). In other words, the trend is positive, but most female college grads don’t make it to the top of the ladder. Moreover, significant heterogeneity remains across countries, and large changes occurred predominantly in countries that voted quotas into law. Finally, women have easier access to management positions in certain industries. For example, 33% of senior top managers in the hospitality industry in 2015 were women, slightly below education (41%) and healthcare (41%), which contrasts with construction and real estate (18%) and mining and quarrying (12%) (Statista).

Men and women make decisions differently

Things are starting to change, albeit slowly, and gender diversity has become a central concern from a social, political, and governance point of view. Given the current overall positive trend showing that women are more present in boards and executive committees, it is important to understand the consequences of having more women in high-skilled financial positions. Indeed, gender diversity might bring diverse experiences, perspectives and incentives into the discussion and improve the decisions that are made.

The literature documents that gender-based differences include behavioural aspects in terms of planning, decision-making, risk tolerance, and overconfidence (Ittonen and Peni, 2012; Khlif and Achek, 2017). Indeed, men and women make decisions differently (Lee et al., 2019) and female top managers tend to be more diligent and conservative, less overconfident, and more risk averse.

Much-needed research is on the way

To understand the consequences of increasing gender diversity in high-skilled financial/accounting positions, researchers from EHL and Grenoble Alpes University are currently working on a project investigating Swiss publicly-listed companies. The goal is to analyse how audit quality is impacted by the interplay of women in the auditor-auditee relationship. Descriptive data show that, between 2010 and 2017, the percentage of audit committees (a committee composed of board members in charge of the oversight of the financial reporting process) with at least one woman increased from 13% to 39%.

Regarding audit reports, it appears that they were signed by at least one female auditor in 26% of the cases in 2010, and 35% of the cases in 2017. These increasing trends are important factors that might impact the negotiation and the relationship between the auditor and the client, the auditing process itself, and the subsequent accounting information quality. For instance, several studies document that women audit partners provide higher quality audits in Finland, Sweden and the UK (Ittonen et al., 2013; Cameran et al., 2017), and that female directors are more effective in dealing with complex audit tasks and judgments (Chung and Monroe 2001; O’Donnell and Johnson 2001; Neidermeyer et al., 2003; Lee et al., 2019).

The results of the study will be released soon. For the moment, however, the figures tell us that women are becoming increasingly present in high-skilled financial functions although there is still a long way to go to reach parity.

[1]Tertiary education is defined by the World Bank as “including both public and private universities, colleges, technical training institutes, and vocational schools.”
[2]Most tertiary-educated people have a degree in business administration or law (25%), while less than 5% have a degree in information technology, natural sciences, mathematics, or statistics (OECD, 2019).
[3] Castell Research Project
[4]Data covering 31 US publicly-listed firms.

Source: Poretti, C. (2021) | Hospitality Net: https://www.hospitalitynet.org/opinion/4103539.html

Covid-19: Hoteliers Review Their Human Resources Strategies

Major hotel chains are reducing their workforce.  The business is performing 50% below normal levels in the European market and Asia Pacific, excluding China [iii] ; Marriott’s CEO Arne Sorenson said that the hotel business was running almost 75% below normal levels. This is the reason behind Marriott’s decision to cut off two-thirds of its 4,000 corporate employees at the Bethesda, Maryland head office, which means approximately two-thirds of corporate staff abroad will also be furloughed.

All the way down to the hotel operation level, the international brands are facing the critical issue of redundancy during this current COVID-19 crisis, regardless of each owner’s specific cash flow situation.

GAS HR

What are your underlying drivers for retention or downsizing strategies?

This article will navigate through the upsides and the downsides of these two strategies: Retention or downsizing. We will provide you with examples and reflections that you may find useful to evaluate your best actions.

The underlying variables of the post-COVID-19 business plan are related to economic and governmental policies, and they are not consistent worldwide. Therefore, in this document, we are not going to provide our opinion nor recommendations. Nevertheless, our hotel asset management team can provide best practices and adapted approaches to each particular hotel.

STRATEGY ONE: TO AVOID COVID-19 LAYOFFS

PRO “ Instilling Loyalty Among Your Staff”

The corporate value of international hotel brands includes the relevant element of employee caring. For example, Marriott states that they put people first and their value is “Take care of our associates and they will take care of our customers.” Besides the written contract, the hotel chains have built psychological contracts with their employee that create unwritten expectations in the employment relationship.

As such, the handling of employee-related issues would determine if the psychological contract is perceived as being kept or breached. The breach can severely damage the motivation and performance of the staff.

In this hyper-connected world, information about mishandling labour-related issues could be quickly propagated and damage the employer branding of the hotel chains. However, it could be an opportunity for hotel chains to show that they care for the well-being of their employees. For instance, Hilton has announced that it will team up with 30 leading companies to provide temporary jobs, in addition to the common practice of covering health benefits. Furthermore, Accor will allocate EUR 70 million in a fund to cover those employees without medical insurance or social security that present COVID-19 health issues and to support front-line healthcare professionals & non-profit organizations. The fund has been raised from the unpaid year 2019 dividends.

The determination to maintain a positive attitude towards staff-caring and experience throughout the crisis is crucial for the recovery phase. There is no doubt that the different hotel brands will restart the competition for the talents in the industry once the market starts to recover. Good employer branding can be a competitive edge. Besides employees do not forget when you support them during tough periods.

CON “Adding Substantial Pressure to Your Cash flow”

When occupancy is plummeting to single digits, cash flow management becomes the lifeline of nearly all the hotels. As labour costs, regardless of the hotel category, generally represent the largest component of operational expenses, multiple hotel chains including Marriott, Hilton, Hyatt, Accor and MGM have announced furloughing schemes as a component of their COVID-19 responses in order to slash costs.  Furthermore, these hotel chains have also declared a different degree of pay cuts for the remaining employees. For example, CEOs put a halt to cash dividends and reduced salaries to senior executive teams by 50% [iv].

The cost-saving exercise should be conducted in a way that allows the hotel to recover quickly once the demand comes back. A salary cut policy is required at every level to survive; in other words, we all need to tighten our belts until the ramp-up stage.

The significance is that, if the termination of the employment contract is not an option, some businesses may be only left with one choice: a total shut down. When planning different financial scenarios, it is essential to manage the working capital for the short term and medium term. Owners need to start pro-active discussions with their banks or other investors to increase their debt service, (we have published another article specifically on this topic).

On 28th March, the Wujiang Hotel Chain, an emerging hotel chain that was formed under the investment of C-trip last year, was the first hotel chain to collapse in this crisis. Xiaodong Ma, the CEO of this hotel chain, has announced they will terminate all employment contracts by 30th April [v] . There is no doubt that the ban on unilateral termination of employment contracts in China during the lockdown has greatly contributed to the downfall of this one-year-old hotel chain [vi].

STRATEGY 2: TO EXECUTE COVID-19 LAYOFFS

PRO “Team optimisation and transformation”

The drastic drop in business has forced many hotels into a minimum level of operation. At the same time, the crisis has made it easier for the operators to identify who are the core staff and who are the weaker team players. We all know that layoffs are necessary and that they open up an opportunity to review the organization to optimize productivity, reduce long term costs and often improve the overall operation/guest experience.

In addition, the Human Resources department should optimize the workforce according to several variables that will impact the labour cost structure:

  • Adjust the business plan with several tentative re-opening dates.
  • Adapt the workforce to different ramp-up occupancy levels.
  • Reorganize F&B team to the gradual opening of the various outlets (the same applies to other operating departments).
  • The well-being of employees: Motivate, train (e.g., new hygiene procedures) and reassure the team after this challenging period.

CON “Consideration of recruitment & re-training costs, and reputation”

As China’s economy is slowly shifting towards recovery mode, many labour-intensive companies, including hotels, have found themselves short of workforce. The reason for this labour shortage varies; but one of the reasons was that some employees were reluctant to return for fear of infection.

Since 2016, many industry analysts have been expressing concerns over a labour shortage at all levels, especially in the operational departments. This phenomenon is highly detrimental to the industry, as hotels’ operation requires a set of expertise in every department. The labour shortage can be statistically proven by the increasing labour cost percentage at hotels.

Also, other than payroll, there is a key factor that justifies the value of raising the labour costs: Training. When hotel management executes a training plan for different levels of staff, the costs included in this are training materials, supplies, certification programs and instructor fees. A thorough training will have a direct positive impact on productivity, customer satisfaction, revenue growth through upselling and enhance employee satisfaction that leads to lower turnover.

It is logical to interpret similar situations that would occur in other sectors in the recovery phase; keeping the current staff may be a sound strategy for minimizing the cost of rehiring. As hotels in China rely on the domestic labour force, it can be estimated that the increase in hiring cost after the crisis can be even steeper for countries which are mainly relying on foreign labour. 

Last but not least, owners and operators should consider that downsizing has a reputational risk, especially if the crisis is short. Before making any decision, it is important to consider the following: What are the hotels core values? How do owners and operators want to be recognized in the market? How will this impact in the recovery period? 

The list of pros and cons of each strategy seems to be limitless and we are only listing out the general considerations. As such, please do not hesitate to share with us your thoughts and considerations on your staff retention and downsizing strategies.

Source: EHL Insight | https://hospitalityinsights.ehl.edu/hoteliers-human-resources-strategies

Global hospitality leaders launch coalition to accelerate gender equality at highest industry levels

Some of the world’s leading hoteliers and hospitality academics have joined forces to launch a pioneering initiative that aims to accelerate the path to improved gender equality in higher level positions across the industry, in line with the UN’s Sustainable Development Goal 5.

LeadingHôtelières is founded by CEO and President of the prestigious HoteliersGuild community, Frank M Pfaller, and co-founded by Lindsey Ueberroth, CEO at Preferred Hotels & Resorts. Considerate Group Founding Partner, Xenia zu Hohenlohe, leads as Chairwoman for the inaugural year and is joined by co-chair Associate Professor of Management at the leading Ecole hôtelière de Lausanne (EHL), Dr Sowon Kim.

The team has enlisted support from the likes of Grand Hotel Tremezzo owner and CEO, Valentina de Santis, leading sustainability architect Yasmine Mahmoudieh, Director of Red Carnation Hotels, Vicki Tollman, Director of Spa at Four Seasons Hong Kong, Dr Tania Bardhan and Hospitality Consultancy WE(i) Think CEO, Celine Vadam, among others, who will all take on vital roles in addressing gender balances at a systemic level, from research, to design, to networking, with communication coordinated by Maria Pajares, MD of Mason Rose.

Additionally an impressive advisory board that will provide expert advice and support is gradually taking shape and includes amongst its advisors Sue Harmsworth, Founder of ESPA International, Professor Dr Henri Kuokkanen, Associate Professor at Institut Paul Bocuse and Dr Willy Legrand, Professor at IUBH University of Applied Sciences.

Ueberroth said: “I’m happy to see more women CEOs in hospitality, but we are still a far cry from where I hope we can be in terms of representation.

“The biggest challenges for women looking to achieve top leadership roles were the need to travel, relocate and dedicate long hours. In the past, once having children and raising a family came into the equation, many women were forced to make a choice, and those challenges were hard to overcome.

“Given the innovations in technology and a more open attitude towards flexible working hours and “home offices,” many of these hurdles seem alleviated.”

LeadingHôtelières aims to accelerate gender equality by providing guidance, mentorship and training through a powerful network of contacts in the industry.

The focus of 2021 is specifically geared towards flexible working structures. Heading the research arm of the initiative, Prof Dr Kim said: “We are currently working on a framework to test whether the outcome of our goal, to improve gender equality among directorial and operational roles in the hospitality industry through updated flexible working schemes, actually works for our hotelier partners. We aim to create new and relevant knowledge and share these findings in a meaningful, productive way.”

Hohenlohe added: “Gender equality is a key part of the UN’s Agenda 2030 for Sustainable Development and any business serious about future proofing itself will need to address this issue.

“We have an incredible collection of women with highly professional profiles paired with great brainpower in this group, all driven by the motivation to ensure the female hotelier of the future will be able to finally have the same opportunities for career development as their male peers.

I am delighted to be co-chairing this chapter with the wonderful Sowon Kim and we hope to be able to make a real difference with this work.”

On first devising the project, Pfaller commented: “When we looked at our HG membership roster we realised that we had far too few women in leadership positions. Reaching out initially to Lindsey, Xenia and Sowon, we were thrilled to realise their enthusiasm to join our cause to making a real change”.

Source: Gosling, S. (2021) | Hospitality Net

Accor Joins Forces With Hoxton Hotels Owner to Form Lifestyle Brand Giant

Accor continued its focus on lifestyle brands Tuesday with plans to join forces with Ennismore, the owner of Hoxton Hotels.

The two hotel brands’ resulting lifestyle entity, which will be called Ennismore, will be headquartered in London and jointly led by Gaurav Bhushan — CEO of Accor’s lifestyle division — and Ennismore CEO Sharan Pasricha. The 73 hotels making up the combined company include brands like Hoxton, Gleneagles, SLS, Delano, and Mondrian. The entity will be two-thirds owned by Accor and a third by Pasricha.

“This exciting autonomous entity with Accor — one with culture and brand purpose at its heart — allows us to come together to build on our combined portfolio of unique lifestyle brands, accelerate our growth and explore new markets,” Bhushan said in a statement. “I look forward to working with Gaurav and [Accor CEO] Sébastien [Bazin] on this exciting next chapter as we become an unrivaled player in the hospitality industry.” 

The new Ennismore entity will comprise 12 brands and a development pipeline of 110 hotels with an additional 70 under discussion. More than 150 restaurants and bars are also part of the merger.

Joining forces with Sharan and Ennismore’s talented teams will be a major step in Accor’s development strategy,” Bhushan said in a statement. “With this combination, we are putting together an unrivaled portfolio of unique brands that appeals to owners, partners and guests, supported by the greatest set of talents in the industry, state of the art distribution and tools and a common ambition to continue to grow and innovate. I very much look forward to our journey together.”

What’s more, Paris-based Accor intends to take on full ownership of the SBE brand in a $300 million investment in order to make the Ennismore deal possible. Accor took on half ownership of SBE — owner of brands like SLS, Delano, and Mondrian — in a 2018 deal valued at $319 million. Tuesday’s announcement comes after Accor announced in September plans to launch an independent division for its lifestyle brands.

Bazin has repeatedly touted lifestyle brands as a key source of growth for Accor in coming years, but navigating the space required more autonomy.

“There are a lot of outside partners knocking on Accor’s doors trying to partner with their own similar brands,” Accor CEO Sebastien Bazin said of the new lifestyle division in September at Skift Global Forum. “But they would only do so if they’re welcomed into dedicated business unit rather than under the large Accor umbrella.”

Source: https://skift.com/2020/11/24/accor-joins-forces-with-hoxton-hotels-owner-to-form-lifestyle-brand-giant/