In this growing world of AI companions, you can tailor your friends. Now yes, it might not be amazing for your mental health to have friends who tell you what you want to hear all the time. And yes, it’s no good for your grip on reality to have the world carved into the Hallowe’en pumpkin shape of your desires, but you can, on occasional, see the appeal.
So when times are dark, why not set your AI companion’s dial to Hilton’s Chris Nassetta? The sector’s golden retriever was walking on the sunny side of the street last week at the group’s Q2 results, where the news of full-year revpar growth of 0% to 2% was barely audible over the cheer.
High points included his telling analysts, that, as the group thought about its business over the intermediate term, he was “very optimistic” adding that, in the group’s “largest market” he was anticipating “a more favourable regulatory environment, certainty in tax reform” and “expected settling down on global trade policy”.
We know what you’re thinking; Hilton’s largest market is the US, right? One can only imagine that the Nassetta AI companion knows something we don’t about the ongoing use of trade manipulation as an attention-seeking tool and one can only be reassured by that. Phew. Because if businesses were unable to plan for the next four years, that might not be super amazing for revpar.
The AI slipped a little with the comment: “Things are being sort of disrupted around the world is maybe bad for new construction” but it was smiles all ‘round with “but it’s actually quite good for conversion activities”.
Hurrah! We could play this game all day but that would be too easy and we’re trying not to hand over the last vestiges of thought to the computers. After all, Nassetta’s audience here are the analysts and they like to think about NUG and not much else (apologies to individual analysts, free thinkers and wonderful people all). NUG for the quarter was 7.5% (forecast at 6% to 7% for the full year) and that, as they say, is bitchin’.
Maintaining this NUG is going to require more of that AI skill: being all things to all people. And Hilton is ready for that, whatever the pervading political environment. As previously noted, Nassetta was happy to talk about “very limited industry supply growth” driving future revpar increases, in the belief that owners would convert to Hilton brands. So we can look forward to a few years of the big hotel players feasting on each other, which should at least have some spill over benefit for the wining and dining part of hospitality.
Nassetta wasn’t just leaning on his team’s charms though, he also talked about new brands, including “several new brands in the lifestyle space, in addition to a couple of new concepts in the alternative accommodation space, a number of which are conversion friendly”.
So the future theme will very much be all things to all people and we look forward to seeing how, in the world of asset-light, Hilton extends its brand further away from the core without damaging the brand name itself. The ragged edges of alternative accommodation are still very much the Wild West, where volume is key and the customer a secondary concern.
Meanwhile at Wyndham Hotels Group, should you set your AI companion to Geoff Ballotti? The group is using Feepar as a KPI so he’s certainly the choice for those of us who appreciate a sparky imagination. Maybe this was because forecast full-year constant currency global revpar growth ranged between down 2% to up 1%, but we like a new word so we’ll move past that. CFO Michele Allen also talked about “headwinds from the solar eclipse”, which is pretty nifty.
Ballotti was not quite full golden retriever, but certainly a faithful friend, with “consumer spending on travel is continuing despite the macro headlines. And we remain optimistic that that revpar, long-term 2% to 3% Smith Travel, domestic revpar CAGR is going to return, especially given the historical low levels of supply that we’ve been seeing”.
Fittingly, he was choosing to look at the growth in technology encouraged by the friends close to the current administration as a sign of future growth, telling analysts that his team had “identified 150 planned data centre projects within 15 miles of a Wyndham Hotel…every day a new data centre project is being announced and we view this as a great multiyear tailwind for our hotels, our owners and our sales teams”.
So the future’s bright, the future’s orange? It is until they run out of fake tan. In the meantime, set your AI to Nassetta.
