“Talk to your kids,” was the advice of Wyndham Hotels & Resorts’ Dimitris Manikis to owners looking to diversify their investments and understand what the guests and employees of the future are looking for.
“They live in a completely different space, they are the consumers of the future... they will talk to you about the things that they need in their lives,” said Manikis, president, Europe, Middle East, Eurasia and Africa (EMEA) at Wyndham.
Speaking at the Resort & Residential (R&R) Hospitality Forum in Lisbon today (10 October), he explained that the cornerstones of success that he learned from his father – a company car, leather chair, corner office and air miles – have been rejected by his children.
Instead of receptionist, for example, his daughter was given the job title of ‘experiences officer’. “That’s how you get new people in hospitality... We all advertise back office – who wants to work in a dungeon?” he added.
“Creating value in leisure is really a difficult balance given all of the needs and wants of the various stakeholders,” said Roger Allen, group CEO of advisory RLA Global.
“We have owners expecting attractive returns, we have operators and their plethora of brands looking for increased market penetration, we’ve got guests expecting memorable, Instagrammable experiences, and employees... stable employment, flexible working hours, a sense of belonging, all of the above.”
Attracting and retaining staff will be critical to support growth and has been a major challenge to the sector in recent years. Pestana Hotel Group is building and renting accommodation to attract and retain employees. Its new 220-bedroom Port Santo hotel, for example, will have 200 staff beds.
“Two years ago, we had only Madeirans [working in our Madeira hotels],” explained chairman and president Dionisio Pestana. Now, the group is looking at recruiting from India, Bangladesh, and Portuguese speakers from African countries.
Despite staffing struggles, Pestana has seen “tremendous success” in the branded residence market, he said, and Wyndham recently celebrated the growth of its Echo Suites extended-stay brand, which Geoff Ballotti, president and CEO of Wyndham, called “the fastest growing all new-construction economy extended-stay brand in the land.” Soft brands, meanwhile, have allowed the group to enter new markets with interesting concepts, such as the Galt House Hotel, part of the company's Trademark Collection.
In terms of location, Pestana is building a €60 million hotel in Paris with European cities a priority as it diversifies out of the Portuguese market, while Manikis advised attendees to “follow the planes”.
“I get the IATA report every month to see where the new routes are introduced – it’s the Ryanairs and easyJets that change the way we travel and how destinations grow,” he explained.
“We see how China is going to increase their flights into Europe next year, we see what’s happening from a new routes perspective – that’s where we see new opportunities... be strategic, be opportunistic, but at the same time read the signs.”
As a mostly franchise business, Wyndham’s focus is also on the owner, and the company launched its Wyndham Community owner engagement platform at its global brand conference last month. Manikis said individual owners are still the backbone of the American market compared to Europe, where traditional hotel owners are being replaced by funds, private equity and institutional investors. As a result, he said there was an opportunity for investors in cases where the next generation are uninterested in taking over the family businesses.
António Trindade, CEO of PortoBay Hotels & Resorts, predicted a positive future, including a 10% increase in cashflow for PortoBay, and a softening of costs for the market following the third quarter. The PortoBay hotel group comprises 15 hotels: 12 in Portugal and three in Brazil, with around 3,350 beds in the four- and five-star market.
However, Manikis also emphasised that businesses need to be agile to react to what is ultimately an unpredictable world.
“It’s not about the three- or five-year plans,” said Manikis. “These are all gone, suddenly you wake up in the morning and you realise your three-year plan has gone down the toilet. You need to be agile. You need to have a plan that reflects the next day... have the right team in place, do business with the right owners, be strategic and opportunistic in terms of growth, and the margins will come.”