NEW YORK — Just as six CEOs of the world’s biggest hotel companies were responding to a question about dampened travel outlooks and increased uncertainty, a short interruption from a protest seemingly drove home the point.
“I don't know what's going on out there, but they're not feeling positive,” joked Hilton CEO Chris Nassetta, as banging and shouting could be heard outside the conference hall at the New York Marriott Marquis and hotel staff rushed to shut all the doors.
Hotel staffers told Hotel Dive they were unsure what the crowd was protesting. After a pause, however, the shouting died down, and the CEOs’ conversation, part of the NYU International Hospitality Investment Forum, continued.
Despite everything — from the immediate presence of protesters to the looming threat of dampened consumer sentiment, exemplified by Tourism Economics and STR announcing a downgrade to their hotel forecast moments earlier — the leaders of Wyndham Hotels & Resorts, Accor, Hilton, Hyatt Hotels, IHG Hotels & Resorts and Marriott International emanated positivity about the hotel industry’s future.
“If you had sat here with us a year ago and said, ‘Next year U.S. consumer confidence is going to hit a 52-year low,’ I don't know that a lot of us would have been pounding the table about the strength of demand,” said Anthony Capuano, CEO of Marriott. “So the fact that there's such resilience and strength across our respective businesses in the face of a metric that typically would have spelled doom for travel is pretty encouraging.”
The following are top takeaways from the CEOs’ conversation, which touched on changing consumer sentiment, future outlooks and opportunities for growth in the hotel industry.
“One of the first questions [journalists] ask us is whether we see signs of trade down within the quality tiers. I think as this next massive group of travelers are just getting started on their travel journey and just getting started in their careers, some number of years in the future, we're going to be talking about that group trading up.”
Anthony Capuano
Marriott International CEO
More on trading up and down: Hotel industry analysts, including some at NYU IHIF, have said economic uncertainty is causing travelers to trade down to lower chain scales or shorter trips for their vacations. Those travelers, however, are still prioritizing travel for their discretionary spending, leading CEOs to be optimistic about the travel industry’s future. “[Travel] has become more of a human need. It's not a discretionary item that comes and goes,” Hyatt CEO Mark Hoplamazian said.
“Luxury lifestyle represents a massive proportion of our total because we're smaller, but the network effect matters.”
Mark Hoplamazian
Hyatt Hotels CEO
More on Hyatt’s upper midscale push: Hyatt decided to grow its network by entering the upper midscale extended stay segment in 2023 with the Hyatt Studios brand. The hotel company opened the brand’s first location in Mobile, Alabama, in April. Hoplamazian said the decision to expand in upper midscale, specifically, was strategic, as it was one tier below the company’s existing brands. “We do think keeping it adjacent is important,” Hoplamazian said. “We're trying to grow continuously as we go down [scales].”
“We missed America. We did. 25 years ago, we should have played here. We lost it. We intend to be in the top three in India. It's going to take 10 years.”
Sebastien Bazin
Accor CEO
More on Accor’s growth strategy: Other hotel CEOs echoed Bazin’s bullishness on India, with Nassetta calling the market — home to 1.4 billion people — “so under hoteled.” Segment-wise, Accor is also pushing upward into “ultra, ultra luxury,” Bazin added, with plans to add a $10,000-per-night hotel room via its Orient Express brand.
“There's a silver economy right now around the world, with the aging of a population that's retiring, but retiring healthier and wealthier than any generation before.”
Elie Maalouf
IHG Hotels & Resorts CEO
More on older travelers: Maalouf said older travelers are on the rise globally, calling out the U.S., Europe and Asia specifically for their strong “silver economies.” Already retired, these travelers don't have to wait for holiday periods to vacation. “They can travel 12 months a year, any week, midweek, which is good for our business,” he said. “But they need different things when they travel — different requests, different priorities — and they’ll pay for it too.”
“When we come out in our wheelchairs in 20 years and [ask], ‘All right, what did we all do?’ It'll be a mid-market story. It isn't going to be that we opened thousands of luxury hotels. … The real story is what's going on in the broader environment — growth in the middle class, more disposable income, desire for experiences.”
Chris Nassetta
Hilton CEO
More on the growing middle class: As countries’ GDPs change, so will their travelers’ behaviors, Booking.com Global Head of Chains Olaf Belgraver shared in a talk earlier that morning. Pakistan, Saudi Arabia, Brazil, Indonesia and Mexico are all projected to join the ranks of top 15 travel countries in coming decades, Belgraver shared. This is driving global expansion of hotel companies — Marriott, for instance, launched a global collection brand in India first — and Hoplamazian connected the trend to Hyatt’s push into lower chain scales.
“What's fueling the [development in] India is the same thing that's fueling our select-service and our extended stay development here, and that's infrastructure.”
Geoff Ballotti
Wyndham Hotels & Resorts CEO
More on extended stay growth drivers: Wyndham has previously said that its U.S. extended stay growth has been driven partly by “historic infrastructure and microchip spend” resulting from laws like the CHIPS and Science Act. Infrastructure projects in particular pose a $3.3 billion room revenue opportunity for Wyndham franchisees, the company said last year. Maalouf added that infrastructure is important on a basic level to travelers, who need to know they can “get there in time and get there properly,” pointing to the recent shortage of air traffic controllers as a concern.
