Life Lessons from HDC 2023: Event Recap

Another Hotel Data Conference (HDC) is in the books! The N2Pricing RMS team was thrilled to take on Nashville again this year. Between a kickoff dinner cohosted with OTA Insight, speaking on a panel about Shaping the Workforce for Today and Tomorrow, and fantastic conversations on the floor between sessions, it’s hard to pick my favorite part.

The sessions were filled with data insights, market analysis, and challenging ideas. I’ve tried to capture some of the magic below for those who didn’t get to attend or who might have missed out on one of my favorite sessions. Read on for an overview of economic trends, some inspired takes on revenue management, and a few life lessons to carry with you.

Economic Outlook: In Search of Normal

Fan-favorite Adam Sacks (President, Tourism Economics) led a fantastic session on the economic outlook and its effect on the hospitality industry. Highlights included:

• Unemployment is down, and wages are up – so what’s the problem? As of July 2023, unemployment remains historically low at 3.5%. Wages are gaining positive ground, and while they’re not at an all-time high, they have greatly recovered from the drastic dip seen in 2021. Despite this, consumers are feeling uneasy, and their spending reflects this.¹ Everyone is anticipating a recession, which Adam believes will hit in Q4 of this year or early 2024. Notably, recession has been predicted for a while now, and when it will happen has proven to be an ever-moving target.
• The culprit (to no one’s surprise) is inflation. It’s the resident boogeyman lurking around every dark corner these days, and disposable income has taken a major hit as a result. People are holding their purse strings a little tighter and not spending as much on travel. The good news is that due to factors such as import price disinflation and and declining producer prices, Adam believes inflation will likely settle in 2024 (though it’s hard to say exactly when).
  
• Business travel looks a little different these days. This isn’t the first time we’ve heard this, but Adam reiterated that Business travel hasn’t bounced back quite as enthusiastically as leisure travel. However, there has been a recent uptick, and Adam anticipates that business and group travel will continue to rise in the back half of the year. Recent data shows that business travelers expect to take more trips to meet colleagues and customers in the next 6 months.²
• Despite Taylor Swift’s best efforts, the US still isn’t drawing in the international crowds. While outbound international travel has rebounded to outpace 2019 levels, inbound travel is lagging. In positive news, regions like the Mideast and LATAM have shown recent upticks in US-bound travel, and Adam forecasts that inbound international travel will return to a surplus in 2024.³

As a man of many talents, Adam also traded out his business casual look for a guitar over lunch! We saw a return of the economist remix of popular songs. All the data nerds (guilty!) rejoiced.

Courageous Revenue Management

Personally, one of my favorite sessions was “Courageous Revenue Management,” featuring Gilbert Arredondo (Sr. VP of Revenue Strategy, Remington Hospitality), Kari Carr (SVP, Asset Management, Pebblebrook Hotel Trust), Priya Chandani (VP, Revenue Management, Pyramid Global Hospitality), Tom Crider (Sr. Manager, Software Development, IDeaS Revenue Solutions) and Sean McCracken (News Editor, Hotel News Now). The panel tackled tough but inspiring questions, such as:

• Question: What is the risk vs. reward of investing in technology?
  
  Answer: There is always an inherent risk associated with any new investment – try as you might, you can’t guarantee the ROI. But if you want to drive ancillary revenue and make major changes, you need to invest in either technology or people. You can’t keep doing things how you’ve been doing them and expect to see different results.
  
  
• Question: What courageous actions are you taking that might look “weird” to others?
  
  Answer: I loved Priya’s notion that it’s courageous to hold your rate, even though RevPAR hasn’t recovered if you adjust for inflation. Gilbert shared the bold idea of actively going after international guests (even though we keep being told that inbound travel is down), especially in gateway cities.
  
  
• Question: How do you empower teams to be courageous?
  
  Answer: Instill a culture of being tenacious. Teach your team that failure is okay and that you learn from it. Gilbert went on to say that if you take risks together as a team, you generate buy-in. Priya also emphasized how critical the art of collaboration is. Finally, Kari encouraged leaders to hold out and wait for the right person when trying to fill a role. Although teams are stretched thin, it’s better to wait and put the right person instead of panicking and making the wrong hire just to fill the seat. Build an empowered team by staffing it with the right people.

Life Lessons

In the opening session, Robin Rossmann (Managing Director, STR) celebrated HDC’s 15^th birthday by sharing some key lessons learned over the history of the conference. These hit close to home for industry professionals (and you might find that they apply to other areas of your life, too).

1. Have Faith. Hotel demand and pricing is highly correlated to the economy. Consumers fear a looming recession, and their spending habits reflect that – but as the economy bounces back, demand will, too.
   
2. Life isn’t fair… and not all recoveries are equal. Local market factors have a huge impact on hotel performance, so not everyone is seeing the same lift right now.
3. …but things even out. Chain scales that were stronger during the pandemic, such as Luxury and Upper-Midscale, are seeing slower growth now (based on RevPAR change). Upscale and Urban hotels were hit harder during the pandemic but are seeing higher RevPAR growth.
   
4. Be real. Yes, more people are working remotely than ever before, and weekday demand still hasn’t recovered. But technology hasn’t replaced the need to meet in person, and business demand is now driving occupancy and ADR growth.
   
5. Make hay while the sun shines. U.S. Hotels have capitalized where demand exceeds supply – and right now, that’s with leisure demand on the weekends. And as Adam Sacks noted in his presentation, the sun is shining a little brighter internationally, where inbound demand is higher than it is in the U.S.
   
6. And finally: work hard, play hard. The shift to WFH is affecting the spread of demand across the week and markets that are linked to local office demand.

Until Next Year, Nashville

HDC is always a highlight of the N2Pricing team’s year, and this event was no different. Beyond the fantastic sessions, we are so grateful for the opportunity to connect with and learn from our peers, friends, and industry leaders. We feel energized and inspired to take what we learned and use it to better serve our customers. We’ll be back on Broadway next year!

If you didn’t make it to the event or didn’t get a chance to swing by the N2Pricing booth this time around, catch up with someone on our team to hear more about what we presented at HDC.

Sources

1. Oxford Economics/Haver Analytics.
2. Business Traveler Survey, “How frequently do you expect to travel for each of the following business purposes over the next six months?”.
3. Adam Sacks (Tourism Economics) “In Search of Normal” presentation given at HDC 2023.