Third-party hotel management company Aimbridge Hospitality has scaled rapidly since its launch in 2003; it's grown its reach to more than 1,550 properties across 49 states and 22 countries. The Texas-based group's broad stable comprises branded full- and select-service properties, luxury and lifestyle hotels, destination resorts and convention centers. Hotels editor Christina Jelski recently spoke to Aimbridge Hospitality CEO Michael Deitemeyer about recovery trends and how the pandemic may change the hotel experience longer term.
Q: How has your portfolio fared through the winter, and are you seeing green shoots in any specific markets?
A: Leisure demand has been talked about a lot. Pre-Covid, we spent all our time talking about markets like New York, San Francisco and Chicago, and there's been this move to now talking about Corpus Christi, Texas, and Myrtle Beach, S.C., and all these other drive markets where certainly leisure has driven demand. Before the second wave the pandemic, we saw that weekend leisure travel held and midweek leisure held. Overall, things held pretty well last year until November, when we were hit by that second wave and then markets began closing back up.
In terms of bright spots, everyone is talking about this pent-up leisure demand, and that is very real. People are searching for places to go. We have 12 resorts in the Caribbean, six of which are open right now. And what we're seeing is that in markets like Puerto Rico, which don't require [return] testing, incremental demand is being driven there. There are different regulations on different islands, and based on those regulations, we actually can see business, be it cancellations or bookings, moving specifically around that.
We're also seeing demand in more affluent destinations that people are driving to, like the Napa Valley, where we have several hotels, and Sedona, Ariz., as well. Those are the kinds of markets that you're seeing exceed prior years in rate. So, there's real demand there, and there's pricing power. And all of this reinforces the point that there is a lot of desire to travel.
Q: Obviously, cleanliness has been a focal point for the hospitality industry amid the pandemic. Will this heightened focus have some stickiness post-Covid?
A: From a cleanliness perspective, as it relates to making sure a hotel room and building meet strict safety standards, there's certainly going to be a percentage of consumers that care about that. And obviously there's a little bit of incremental cost there. But I'm sure at the same time, as we move forward, there's going to be a degree of customers who don't want people in their room as often, or don't need their room cleaned as often.
Those things will have a cost impact as well and counter some of that cost creep. Whether or not that change will happen will depend on the brand, and it will be different as you move up in product category. When you're paying $1,000 a night, do you want your room cleaned and made up while you're out during the day? Yeah, of course. I think there's going to be all types of consumers in all categories, but I do think as price point moves up to upper upscale and luxury, the brands will need to be a little more careful about what they think is optional and what is a traditional service.
Q: What about the rise of the contactless technology we're seeing permeate the hotel space? Do some of those shifts have staying power?
A: Some contactless services are done very well and are well executed. That includes things like having a coffee shop in the hotel lobby, but you can scan a QR code in your room, order ahead of time, and then your coffee is downstairs waiting for you for pickup. You don't have to interact with anyone.
I think it's absolutely done well as it relates to menus and as it relates to the brand strategies around keyless entry. Certainly, we are removing a lot of contact for the guests. But again, as you move up the chain scale, there has to be a balance between contactless and enhancing the guest experience through human interaction, right?
So I think as you move up the chain scale, it's really got to be not forced. It might be forced in the economy and midscale hotels as part of the brand, but it's important as you move further up that it's more of an optional service.