TORONTO ― Aside from those regions affected by the decline in oil prices, hotel industry insiders are generally optimistic about the future of hotel investment in Canada. That was the general sentiment at yesterday’s Canadian Hotel Investment Conference, which took place at the Hilton Toronto.
Sessions covered the impact of oil, the scale of transactions in the last year, primary and tertiary markets, capex, design trends, conversions and so much more. The highlight for many, however, was the interview of Bill Marriott, executive chairman and chairman of the Board at Marriott International, by his daughter Debbie Harrison, global officer – Culture and Business Councils at Marriott International.
Conference delegates crammed into the ballroom to hear the iconic hotelier share life lessons, challenges, insights about leadership and forecasts about the future. Getting buy-in and consensus management are two facets of Marriott’s leadership characteristics. “You have to surround yourself with really good people; you need all the input you can get,” said Marriott. “I also learned, leave your ego at the door. I think ego is a great destroyer in any business or any walk of life.”
Marriott spoke at great length about the challenges brought on by the millennials ― which comprise 60 per cent of the company’s customers ― and the way they are shaping the hotel business. “They’re on [the Internet] 24-7, and social content on the Internet is what it’s all about,” he said. “They’re not paying attention to advertising anymore. They’re paying attention to what they see and hear on the Internet. And we want to be part of that Internet conversation. We want to be invited to converse with them.”
Another growing concern for the industry is the proliferation of disruptors such as Airbnb. “They’re not paying their taxes. They don’t have to abide by all the codes and the regulations the hotel industry has to abide by,” noted Harrison. “And frankly we really are afraid of the business they’re taking away from us, especially to the millennials because they like that authentic experience they get when they go into a new city or town. [Airbnb’s] market cap value is astounding and they’re beyond the reach of even being acquired by a hotel company because they’re worth so much money. So we are concerned about what they’re doing. We’re working on it from a government affairs standpoint where we’re trying to level the playing field and we think it might take some of the air out of their sails.”
Following this interview, organizers took a moment to honour industry veteran Michael Beckley, SVP of Development for Marriott Hotels of Canada, who is retiring after more than 56 years in the hotel industry.
The afternoon breakout sessions examined whether to build or reposition, how much to set aside for repairs and maintenance and demand generators in tertiary markets, including land pricing, the impact of more supply, historical RevPAR, the diversity of industry and transportation routes. Experts agreed that the outlook is very positive for Eastern Canada and Western Canada, but slow in Alberta. Segment is also market driven but there is opportunity for extended-stay and economy lodgings in secondary and tertiary markets.
For a complete overview of the Canadian hotel investment landscape, pick up the May issue of Hotelier.