Crystal Ball Conference

    Predictions, Debate, Data, Bigger Voices swirled among attendees of CHLA’s Crystal Ball Conference in late August. Panelists, presenters, and participants made it clear during a full day of discussions at the Westin Verasa Napa that what the future holds for California hotels depends on who you are.

    Guests are combining business with leisure traveling to create “bleisure” stays.
    Employees no longer are enticed by wage/benefit offers alone, as in the past, which leaves staffing gaps that impact occupancy capabilities.

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    Many municipal leaders seemingly expect tax revenue from hotels to flip back to pre-pandemic levels—despite hotels being mostly closed for two years.

    These new realities, and debates about their longevity, led to lively discussions from presenters and among attendees, who heard from about a dozen experts who run hotels, sell/buy properties, and analyze industry data.

    All agreed that 2023 will reveal how much and, potentially, how long travel will remain changed by the pandemic’s impact on guests and employees along with regulatory demands. Most presenters suggested that fundamental change has occurred, yet debated how long it will last, suggesting the answer depends on the evolution of convention and business travel.
    “We’re facing a fluid business, particularly with housekeeping, as our expense side is hard to budget and predict,” said Perry Patel, BPR Properties Partner.

    “There are no historicals to analyze the 2020 hotel sales numbers,” said Alan Reay, President and Founder of Atlas Hospitality Group. “Yet, 2021 had a record number of hotel sales and a record number that sold for more than $1 million per key.”

    Although there was uncertainty about the post-pandemic reset’s impact on the business of hotels, there was agreement that behaviors by guests and employees have changed, and likely will be sustained.

    “It is important to listen, know what to look for, and yet, not overthink what may or may not be structural in change,” said Michael Dominquez, President and CEO of Associated Luxury Hotels International. “Guests, employees—people—are decisively indecisive now and are searching for what they want and what may become a new normal.”
    The impact and strength of the hotel voice on pandemic policies highlighted several discussions about deepening hotel engagement with their communities, regulators, and elected officials.

    “The key is understanding human relationships. It’s not always us versus them,” said Scott Nowak, Director of State/Local Government Affairs for Hilton, referring to communications with elected officials.

    “How much the hotel industry means to city budgets wasn’t always so clear to elected leaders,” said Jason Riederer, Senior Director of State/Local Government Affairs for AHLA.

    “Now, well, they are aware of the budget impact of the transient occupancy tax.”
    Nowak and Riederer’s panel, “Engage Elected Leaders to Defeat Bad Policy,” emphasized that California hotels have an opportunity to be heard and impact policies if they are engaged consistently with local, county, and state leaders.

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