By Rosanna Caira

TORONTO — The hotel investment community converged on Toronto’s Sheraton Centre Hotel April 24, to learn about some of the key trends impacting the industry, as well as to network and build relationships. Orie Berlasso opened the conference, welcoming delegates to this year’s edition and introducing Irwin Prince, president and COO of Realstar Hospitality to the stage to introduce Susie Grynol, president of the Hotel Association of Canada. Grynol told the crowd that HAC has been focused on advocacy for the hotel industry since she joined the group more than a year ago.

“We’ve been laser focused and have streamlined our advocacy,” said Gynol pointing to her priorities for the past year: Fair rules for the sharing economy (read Airbnb) and labour shortages. She stressed government involvement has been key, pointing to a new government funded labour program — a three-year pilot project that aims to help hotels hire more staff for their properties.

Nik Nanos from Nanos Research and Craig Alexander, of the Conference Board of Canada, tag teamed it during the opening presentation, which took a look at the big picture, touching on how the economic downturn of 2009 set off a series of events that impacted the world. “The world economy drove our economy,” said Alexander, adding that trouble in China, Brazil, Russia and China affected the world.

Nanos regaled the crowd with stories of how the election of President Trump in the U.S. is affecting the world. “Creeping populism is picking up steam everywhere,” he said, touching on how politics is impacting economics. Alexander added that increasing protectionism is going to hurt Canada. “The Canadian economy is shaped by what’s happening in the U.S. since we are plugged into a North American economy. The renegotiation of NAFTA is the number-1 issue affecting the economy, he stressed. Nanos agreed, saying “When Trump says NAFTA is on the line, just by tweeting something he is sending out an informal message. We should be focused on the signals he sends out.”

In terms of performance across the country, Nanos told the audience that Vancouver showed the best growth last year, at three per cent, followed by Alberta at 2.7 per cent, P.E.I., N.L, Quebec, Ontario, Manitoba, N.S. N.B. and Saskatchewan. Overall, the duo agreed that Canada is an “oasis of stability and tranquility. But despite the sentiment, Nanos also point out that a recent survey pointed out that the majority of Canadians don’t believe the next generation will have a higher standard of living than the current generation.

Alexander also stated that the Canadian dollar is forecast to be at 76 cents but added it could go even lower. He also warned that demographics — specifically aging boomers — means employment shortages will become an issue. “It’s why government is changing immigration numbers. Baby boomers are so numerous that no amount of immigration is going to solve that.”

From a macro outlook to a micro one, the morning’s second session, entitled, “The Good, the Bag and The Opportunity” featured commentary from three analysts: Erin O’Brien, Carrie Russell, and Scott Duff who took the audience on a national journey highlighting performance issues of the past year. As O’Brien noted, we’ve been on a strong eight-year bull run, with strong record performance. We don’t see a lot of ugly out there.”

Russell agreed pointing out that RevPAR in B.C. grew by 10 per cent, with the highest bottom lines and cap rates at record lows. The question on everyone’s mind, she said, is “when will it turn?” Boasting 33 city-wide conventions last year in Vancouver, B.C. continues to show strong performance. “It’s the highest number of conventions for Vancouver since the Convention Centre expansion a few years back, begging the question, “Are hotels making money?” Russell believes they are. “People want to get into the market.” Asked whether this is a sustainable market, Duff said there’s nothing to suggest a change, adding that the high value of land in Vancouver means there are not a lot of new hotels being built.

O’Brien noted that Alberta is finally in recovery mode. “Things got better in 2017; profits didn’t go up but they didn’t go down,” she stressed. RevPAR in Calgary is up and the supply pipeline is easing.” Saskatchewan saw provincial demand improve but RevPAR was down both in Saskatoon (5 per cent) and Regina (10 per cent).

Capitalizing on New Tech Trends
Brad Hutchings, of Deloitte LLP, took delegates through some of the salient tech trends impacting the hotel industry. Hutchings believes the advent of the digital age occurred in 2006 with the launch of the smartphone. He told the audience the focus has shifted from product experience to guest expectations. The Internet of Things and robotics make it clear that machine learning is here. He also reiterated that the future of hotel operating model will shift from putting heads into beds to becoming a bridge to new technology, meaning experiences will trump the physical bricks and mortar.

“All these products will change your business,” he told the audience of hoteliers, also noting that “human talent will make a difference in how innovation is executed. “You need to think differently,” he said, pointing to a shift in focus to more outcome based. “Investing in people is going to be absolutely critical as we go forward with technology.” To wrap up, Hutchings left the audience with some pearls of wisdom: “Forty to 60 per cent of how we deliver business could look very different in five years. Hotels will need more than brands to differentiate themselves in the future.”

Here are a few of Hutchings’ top trends:
1. IT unbounded
2. Dark Analytics –determining behavioral date – why do customers make certain decisions?
3. Machine Learning – bots and robotic solutions are augmenting and automating humans with robotics now becoming very feasible. AI is not just for IT tasks
4. Mixed Reality (virtual tours, virtual experience and gaming, inflight entertainment, immersive shopping experiences) will change many businesses. More than one billion smartphone users will create content with augmented reality, AR.
5. Inevitable architecture – hybrid cloud deployment
6. Everything as a Service will allow users to reimagine current offerings as services
7. Blockchain trust economy is here to stay, changing the hotel distribution platform


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