Industry Update
Press Release11 September 2019

As 3rd Quarter Brings Hospitality Conferences, AETHOS Shares Personal Observations on Industry's "Hot" Issues

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AETHOS Consulting Group

As our industry now embarks upon its critical Third Quarter of the Year, and Conference Season is back in full swing, the partners of (hospitality-focused human capital advisory) AETHOS Consulting are gathering their collective observations and insights to share with lodging, food and beverage, and tourism leaders. Some of these issues transcend across borders and continents and some cross over into disciplines of the industry too:

  1. Labor: "Labor is always a hot topic in hospitality," explains AETHOS CEO Keith Kefgen. "The two big issues are minimum wage and immigration. Hospitality operators will have to find a way to find greater profitability with 10 to 15% increases in wages; efficiency and technology will have to play a role. The other issue is actually quite simple: no immigration, no line-level employees. No line-level employees, no diversity. No win."

  2. Technology trends: Hotels will increasingly continue to leverage mobile technologies to enhance overall guest experiences such as check-in, keyless room entry, food and beverage ordering services, and even controlling the in-room climate.

    "'Big Data' is used to help hotel companies further personalize their guest experience," says AETHOS Managing Director Andrew Hazelton. "As the savvy traveler desires more personalization, companies will step up to properly acquiring guest information and curate these experiences." With Big Data comes the enhanced need for cybersecurity. Hotel companies will continue to spend dollars to protect guest privacy from online bookings, apps, and on-property usage.

  3. Real Estate Trends: "Opportunity Zones are the rage," adds CEO Kefgen. "The tax code changes from the current administration were driven largely from capital gains investors who wanted a tax break to put their money to work. The Zones were supposed to be in urban and economically-challenged neighborhoods. Interestingly, much of the development to date favors larger and better capitalized developers who are taking advantage of the change. I suspect that the fringes of the Zones will be developed and will miss the intended targeted residents. That said, hotels and mixed-use projects are viable now in these zones. The question is, 'how long will they last?'"

    Private Equity is still a force in hotel investing, "but it has slowed down. If mergers start to increase, we suspect that private equity will be in the middle of it," says Kefgen. "One-off sales don't really favor PE investors unless you're a major player and already have a portfolio."

  4. Travel Trends: "Wellness tourism continues to be on the rise as active travelers deliberately seek opportunities for physical exercise and adventure - to rejuvenate and kick-start new beginnings," shares AETHOS Managing Director Matt Peterson. "Brands will continue to incorporate wellness into their concepts, particularly as we hear more about 'mindfulness' and the need for individuals to stay mentally as well as physically healthy."

    "Major 'sharing economy' players like Airbnb and Uber aren't going anywhere and continue to see increased usage from leisure and business travelers," Peterson continues. "We suspect more traditional hospitality organizations will also join this segment of the business."

About AETHOS Consulting Group is a global advisory firm serving the hospitality industry. The firm enhances value for its partner organizations via access, know-how and fresh thinking. Core competencies include executive search, compensation consulting, business strategy and psychometric assessments. The firm is designed as a single partnership operating from ten locations in North America, Europe and Asia Pacific.

Leora Lanz (for AETHOS)
LHL Communications
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