Virtual Summit Keynoter Forecasts Hotel Occupancy Growth

This year may see the continent-wide return to business travel needed to generate enough hotel guests to restore linen volume to pre-pandemic levels. Watch for more workers to return to their offices, a luxury hotel marketer told a TRSA audience tuned in to TRSA’s Hospitality Virtual Summit & Roundtable on March 16. As this occurs, you’ll note hotels becoming less dependent on rate increases to improve revenues as more guest rooms are filled.

Michael Dominguez, president and CEO, Associated Luxury Hotels International, reported indications the group travel market is rebounding. Requests for proposals (RFPs) to his hotel clients were greater from July to December 2021 than the same time in 2019. They dipped 18% in January then set an all-time record for February. It appears his clients underestimated how many rooms these events would require.

Speaking to TRSA’s Virtual Hospitality Summit, Dominguez forecast group travel shaking out with larger in-person meetings broadcast to virtual attendees. “There’s an overcorrection right now,” he said. “We have more people coming out of this saying, ‘I’m not having anything virtual, it’s just going to be live.’ People are tired because they haven’t had enough balance.” In the long run, broadcasts will remove some demand for traveling to in-person events. But Zoom meetings will largely replace conference calls instead of face-to-face meetings, as businesses recognize the latter as “better than any black box you’ll ever see. To get together face to face is very different.”

More organizations will recognize they can’t accomplish their goals with virtual meetings, he predicted, particularly sales. About 5.3 million new businesses opened in 2020-’21 and “they’ve got to get in front of people.” Dominguez anticipates the financial sector leading the charge to sell in-person as they propose solutions to customers and prospects to address growing inflation. “Bankers are going to do a lot of business,” he said, fostered by their top management. “When your execs travel, everybody starts to travel.”

Less business and international travel make the current scenario “a bit of a reverse recovery,” Dominguez posited. Usually hotels need to recover when the economy has taken a toll on them; today, social distancing stands in the way, which makes government a key driver, particularly as it relates to international traffic. “We know there’s pent up demand for traffic into the United States and we think that will recover. It depends on testing mandates and other protocols,” he said. The Ukraine war could have an impact, too, by restricting airspace and requiring different routes to reach North America.

Summit participants were updated on findings of TRSA’s Market Recovery and Expansion Research as it relates to opportunities for hotel linen service. Presenters were Logan Murtha, creative strategist, Yes&, Alexandria, Va., the TRSA agency undertaking the research; and Steve Miller, VP, Victor Kramer Co., Seaside Heights, N.J., the Crothall Laundry Services division that consults with laundries.

The research will foster messaging and resources for TRSA member company use and create targeted, regional advertising and outreach to support such marketing. Findings indicate potential for messages based on these concepts to resonate with hotels:

• Add convenience and cleanliness to cost savings: outsourcing as a means of alleviating current pressures
• Help hospitality operators better understand how hotel visitors prioritize linens: nice rather than branded
• Build confidence hoteliers can avoid decisions that add cost and complexity to their business without benefiting guests
• Consumer results show three out of four hotel visitors more likely to book with Hygienically Clean and/or Clean Green certifications – could be stronger differentiators than previously believed
• Hygienically Clean as safer and better for guests and employees

Also part of the Summit was a roundtable discussion for attendees to share recent experience in serving the hotel industry. Optimism was evident regarding converting customers from simply washing their items (customer owned goods or COG work) to renting linen as well. One linen service reported long-term success with renting linen to hotels – 90% of volume – compared with COG work.

There’s been some additional interest in rental from hotels as they face short supply of their branded linen. They anticipate this problem will subside; for now, they will take whatever they can get. Accommodating this temporary demand is a contractual challenge for outsourced laundries. It’s not clear whether this is a long- or short-term opportunity. Typically rental doesn’t allow companies to use “proprietary” linen brands, which make such service difficult to standardize. It would also be challenging given hotels always seem to need more linen, rarely maintaining the needed inventory for COG service.

Click here to visit TRSA’s On-Demand Learning Center to view TRSA’s Hospitality Virtual Summit sponsored by JENSEN.