Meet owners’ new problems; same as the old problems?

Yeoh moderated a “Views from the Boardroom” panel that was part of the opening session of the Hotel Investment Conference Asia Pacific (HICAP) event in Singapore, produced by Northstar Travel Group in association with The BHN Group. This event continues through October 25 and is being held at the Fairmont Singapore and Swissotel The Stamford hotels.

The panelists included Siew Kim Beh, chief financial and sustainability officer of CapitaLand Investment and managing director of Japan, Korea, Vietnam, Cambodia, Myanmar for The Ascott Ltd.; Peng Sum Choe, CEO of Pan Pacific Hotels Group; Christopher Hartley, CEO of Global Hotel Alliance; Jean-Jacques Morin, group deputy CEO and premium, midscale and economy division CEO for Accor; and Jeff Wagoner, president and CEO for Outrigger Hospitality Group.

During the panel, Beh talked about the importance of having sustainability in her title and why it’s key to have that person come from the finance side.

“There’s a lot of cool benefits of having the finance person [in charge of] sustainability,” she said. “Because the CFO is attending most of our meetings, we can have a lot of influence in a lot of decisions that we make… When you think about sustainability, it’s always a cost, right?...  The focus on sustainability is always a longer-term perspective; when you have a financial perspective, you have a more balanced approach toward implementing sustainability.”

Wagoner talked about the importance of Net Zero and how that result will be a group effort with outside partners, namely companies that provide power or water to hotels.

If you’re a sustainable hotel, the support is tremendous… We’ve seen a big increase in companies supporting us just because we have investments in sustainability.

Peng Sum Choe, Pan Pacific Hotels Group

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“When you think about ‘it takes a village’ type of mindset, that’s what has to happen here,” he said. “This is not necessarily just in our hands… Many things have to change that are outside of what we do day in and day out to get to Net Zero. If your power provider doesn’t get you there, you will not get there. You won’t be in it.”

Choe discussed the tremendous cost of hotels becoming sustainable and how that isn’t necessarily something guests can see.

“Building a sustainable process costs a lot of money,” he said. “So, for example, even to cool this [ballroom] takes a lot of energy… So [guests] don’t know what kind of investment it costs to be a sustainable hotel… But if you’re a sustainable hotel, the support is tremendous… We’ve seen a big increase in companies supporting us just because we have investments in sustainability.”

Hartley discussed how customer loyalty programs for some of the biggest hoteliers in the world are being used as inspiration for the Global Hotel Alliance in managing costs with OTAs.

“I can give a pretty scary statistic. Because we’re in a private alliance, between us we’re spending about $400 million this year on Online Travel Agents (OTAs),” he said. “That’s a significant amount of money that could otherwise go to our bottom lines… How do you save that? The answer is you have to get credit with the customer. If you give the customer a reason to interact with you directly… And you can save about 50% of your cost of acquisition costs… We estimate this year, we’ve got about $70 million of savings through customer engagement. That’s a significant contribution when we own and operate these assets.”

Morin discussed how the AI revolution is making hotels choose the battle of missing out or deciding when to get in.

“The AI revolution is here to stay. The issue for AI is somewhere between FOMO and FOGI,” he said. “Fear of missing out (FOMO) — you don’t want to be late and what is the competition? And you also don’t want the fear of getting in (FOGI), which means you don’t know what it will cost… Many issues need to be resolved on the other side because of the data we use and collect and data protection.”