Meet the Future Hilton Hilton identify building blocks of ROI, NOI, TLC in next-gen hotelsBy Mary Scoviak | February 21, 2023Share Multi-generational markets, mobility and mass customization offer new lenses for seeing revenue opportunities. Hotel investors got a preview of the fiscal, physical plant and service changes likely to hit their balance sheets in the next two to three years and a play book on how to leverage customer and economic trends to profit from them at an exclusive “Meet the Future” session at the Americas Lodging Investment Summit (ALIS) in Los Angeles.Designed as a conversation between a brand’s CEO and a rising star in the company, each of the five “Meet the Future” discussions homed in on strategies aimed at keeping brands and owners ahead of the shifting curve of consumer expectations and economic realities. In their January 23 session, Hilton President and CEO Christopher Nassetta and Senior Vice President, Global Brand Strategy Lara Hernandez joined moderator Jeff Higley, president, The BHN Group, to talk about business-building trends across the brand spectrum.On monetize multi-generational travel:Christopher Nassetta (CN): Trying to build a brand around the perceived profile of one generation is a fool's errand. We’re never going to be in that state. Hilton’s hotels are always going to be serving multiple generations. Doing that (multi-generational capture) is a function of demographics. It’s about staying connected to our team members of all generations and making sure they a voice and are able to contribute because they have a different perspective on it. Ultimately, as in any service business, it’s about listening to our customers.The technology we have now gives this industry an extraordinary opportunity that allows us to mass customize experiences from what a certain generation dreams about when planning a trip to the booking process to the atomization of inventory. We know what they liked from previous stays, what their preferences are. That technology affects how we sell to those expectations with the on-property experience and the after-property experience. We can now customize that at the scale of hundreds of millions of customers a year in a way that will appeal more to people of different generations. If we get the product and the service right, we can overlay that with selling customers what they want in the way they want it at massive scale and, when they arrive, give them an experience that’s more relevant to their needs. That has been really hard to do up until probably the last five years. Technology is the moonshot for mass customizing multi-generational market growth in ways that we’ve only been able to imagine up until now. Christopher NassettaLara Hernandez (LH): When we’re looking at how our brands stay relevant in a way that matters to consumers multi-generationally and globally it comes down to the product, service and the technology enablement that matters most to the market. Why is that guest traveling? What experiences do they expect based on their generation but also on what’s important to them as individuals? What are consumers across all generations using in their lives? What do they use at home? What are they comfortable with in this post-COVID world? They know the things in their lives that they love, that they’re comfortable with.They expect that hotel brands will make it seamless for them to keep their routines on the road. So, brands have to continue to maintain the product and the product quality and continue to evolve. We have to work with vendors and work and investors so that we were regularly keeping things fresh. The other piece is the service model. Each one of our brands serves a very particular purpose. We have to look at that service culture, that service ethos and identify what is going to continue to evolve in that brand to keep the customer coming back over and over again.On growing the ROI of wellness:LH: As an industry, we’re just getting started with wellness. Fast forward 10 years from now or even two years to five years from now, and it will be so integrated into what the stay looks like. Traditionally wellness has been about fitness and spas. While those are really important components of wellness, it’s really about the whole experience. Wellness will impact how we view everything from sensory experiences to design. How we build the sleep experience is so exciting in the wellness space. Leisure travelers might come in and work from their room or work in a public space and work a half-day and then go spend time out in the community. Whatever it is that they’re going to choose to do, wellness as red thread is a non-negotiable for travelers.On getting the payoff for customers’ increased mobility:CN: One big trend that’s been going on in the world is increased mobility. Whether it’s air, rail, sea, methods of communication or technological innovation, the world has just become more mobile. It’s been the greatest boom that has ever happened for the hospitality industry. When customers become more mobile. They have to stay somewhere. Sometimes that’s with mom and dad or a friend or whatever. But largely they’re going to stay in hotels. I would argue that COVID accelerated the traffic. A lot of things are normalizing after COVID. However, the work environment is changing. It was already going toward a little bit more flexibility and now it’s going to more flexible. But what does that mean? They have to move around. They have to go to the corporate office. They have to go out and see clients. Instead of doing five or 10 nights somewhere, they’re going to do 30 because they need to go to a certain client or they need to go to the home office to do training for a number of weeks.There’s a lot of learning that comes from that that will impact what we should do with the product in terms of wellness, food and beverage, certain segments of extended-stay and more flexible meeting space. The undercurrent of it is super good if we respond to it because people are going to be on the road more.On Optimizing technology on the P&L:CN: The next thing in technology will be the atomization of inventory. We can track guests’ data to know what to sell them, what kind of room they prefer, where it is in the hotel, what goes with it and package and sell it to them the way they want it. That allows them to adjust and atomize what they want to buy and how we can deliver exactly that. We can be very, very specific with modern technology.LH: The enablement of technology to free up time for team members in a hotel to do only what humans can do is an important, ongoing trend. Hospitality is a people-serving-people industry that allows humans to interact with other humans. We’ll see advances in how to use evolving technology to free up our team to spend time taking care of our customers. Lara HernandezOn expecting a reasonable timeframe for execution:CN: All of us (in the hospitality industry) have suffered through COVID, particularly in the ownership community. While these trends signal important changes, they need to occur over time. We have to be thoughtful about when and how we do it. We and our owner advisory councils are having a dialogue on a regular basis on what we’re thinking about reprogramming and renovating hotels, and certainly as we look to incorporate these trends into our prototypes and into renewing brands. It’s going to be a journey, but it’s the right thing for the industry. Still, it’s going to be tough. Knowing what human behavior is going to be two or three years from now is still a little bit uncertain. So, we have to be cautious about how we move forward. There will be opportunities and we will respond to them. But I think we need to take it in really thoughtful steps and see how customers respond.