According to Harry Javer, founder and president of The Lodging Conference, I will now have attended the annual gathering nine times. NINE TIMES… for all my Ferris Bueller fans.
In case you didn’t know, The Lodging Conference is where the collective hotel industry gathers once a year to learn some, talk shop and luxuriate in the dry Phoenix heat at the JW Marriott Desert Ridge. In fact, if you are reading this column right now, and you work in the hotel industry, which would make eminent sense since this is a magazine focused exclusively on the hotel industry, there’s a strong likelihood that you are at the conference—whether absorbing discussion during a panel session, conversing with a colleague over coffee or lazing about by the pool (I don’t judge).
Though I’ve covered the hotel industry for more than those nine years, just shy of a decade is a good place to judge where it’s come in the years leading up. The forgettable band Everclear put out a kinda memorable song in 1997 called “Everything to Everyone.” The song topped the U.S. Billboard Modern Rock Tracks in December, offers a nice guitar riff and has something (maybe) to do with the duality of man. To me, though, it is a nice way to nostalgize what lodging companies were; meanwhile, One Direction’s “One Thing” is a better way to encapsulate them today.
Lodging companies, from Marriott to Hilton, Hyatt to IHG, used to be a lot like kids shipping off to summer camp, where, beyond giving their parents some respite, they take part in various types of activities—archery one day, baseball the next, some afternoon kayaking, morning tennis and, if they really are game, there is rock climbing. In short, doing lots of different things rather than concentrating on one thing.
Before the splits and spinoffs, legacy lodging companies owned assets, operated them and put their name on them. The Twin Bridges Marriott Hotel, née Marriott Motor Hotel, was owned, operated and named by Marriott from its 1957 opening to it sale in 1978. That was then, this is now. Today’s hotel industry looks less summer camp and more specialized sport, where the focus is singular. Instead of dabbling in a bunch of different activities, home in on one thing and do it well. In the case of lodging companies, it means laying down their ownership and operational arms to focus solely on franchising. It’s a sea change that’s transformed the hotel industry.
As JLL wrote in its August “Global Real Estate Perspective,” the global hotel operating model is undergoing a significant shift as the major brands prioritize unit growth over management contracts. It’s created strong suits and professionalization, especially for third-party management companies, which owners now need to be more cognizant of and educated about in the absence of brand management that is going the way of the dodo.
JLL points out that the global portion of franchised hotels (those managed by third parties) has grown by 4.6 percentage points over the past 18 months and should increase, which will create opportunities in what still is a highly fragmented third-party management space. The largest of these, Aimbridge, is our cover story this issue.
I looked forward to summer camp growing up—a chance to see friends but above all throw a baseball, shoot a basketball or paddle a canoe. It was a long time ago. Today, I might conclude that hitting a golf ball year-round is the smarter move. Maybe I wouldn’t be as well-rounded, but, just maybe, I’d be cashing checks on the PGA Tour. Lodging companies are choosing to play as a single.
