Bright Outlook For U.S. Hotel Growth
Prepare for strong growth and demand in the hotel industry.
By Erika Prafder for Hcareers.com
Put away those umbrellas.
There are sunny skies ahead for the U.S. hotel industry, which just wrapped up a record-breaking, banner year, according to forecasting experts.
“In 2014, the U.S. hotel industry sold more rooms and will have generated more room revenue than ever before,” says Jan Freitag, senior vice president of strategic development at STR, a leading global provider of competitive benchmarking, information services, and research to the hotel industry.
The company anticipates occupancy to end the year at around 64 percent, a level unseen since 1996, according to a recent STR press release.
Driving factors of the strong demand growth include, “Leisure travelers, a healthy demand from business travelers, and a continuing rebound of the group traveler, which was hit hard during the recent recession,” says Freitag.
The highest RevPAR (Revenue Per Available Room) gains were seen in such markets as Denver, San Francisco, and Nashville, Freitag adds.
“Leisure demand for a city in the heartland (Nashville) with a wholesome brand is very healthy. Group travel has sky rocketed here. It also doesn’t hurt to have a TV show named after your city,” he says.
More development and hiring needs on the horizon.
Since hotels take a while to come to fruition, the majority of newly opened lodgings this year and the next were planned in 2010-2011, says Freitag.
Therefore, “We’re expecting slow growth in new supply. But, since the industry is very attractive now, developers and bankers are putting money into the industry now, and you’ll likely see new rooms in 2016-2018,” he says.
As they’re fairly cheap to construct in comparison to full-service hotels, the majority of new properties will be limited service hotels. “Those that don’t have big ballrooms or restaurants. They are basically just offering rooms, a gym, and serving breakfast. There’s a need for people at the front desk, in housekeeping, and general management, so the staffing model is much more attractive than for a full-service hotel,” says Freitag.
With the timing right to enter the hospitality field, those with the drive and commitment have carte blanche to carve out a rewarding profession—whether you’re at the early or more advanced stage.
A view from the top.
“Our industry is ripe with opportunity for young professionals looking for a life-long career,” says Jim Abrahamson, chief executive officer, Interstate Hotels and Resorts and chair of the American Hotel and Lodging Association (AH&LA) 2015/2016. “Hotels offer good paying jobs with benefits and a fast track to more senior positions. No other industry epitomizes the American Dream like our industry. And it’s a lot of fun, too.”
Abrahamson himself, worked his way through college as a desk clerk at a Bloomington, Minnesota area hotel.
"I’ve done every job imaginable in hospitality," he says. "So many industry leaders started out with little or no hotel experience and worked their way up the ladder of opportunity the hard way. Along the way, myself included, we got that specialization that is unique to hotel businesses. And that’s really important to grow as an individual and to help further your career. That said, education is incredibly important in helping individuals get further faster. Before you specialize, find your passion, then do all you can to become an expert in that area."
With key career moves to Hilton, Marcus Corporation, Hyatt and IHG, to his current role at Interstate, an organization which manages over 45 brand relationships worldwide, Abrahamson largely credits his focus and important mentors for his success.
“My career has been very linear, I set strong goals for myself and the organizations that I have led. I think it’s very important to know where you want to end up and aim for that. Our industry is one that fosters mentoring, and I’m a big believer in making room for the next generation of leaders,” says Abrahamson.
Think global and cast a wide net.
For aspiring industry frontrunners, “Global exposure is a solid path for the right individuals. It takes a different mindset and adaptability to new cultures and surroundings. I encourage young managers to look for international options early in life—it gets more difficult and complicated with spouses and children later on,” says Abrahamson.
To stay on top of his game, Abrahamson maintains a strong connection to his team.
“Stay in touch with them, understand what they’re dealing with on the front lines. Stay in touch with your collegial network and have a strong peer group to relate to, too,” he says.
It’s also advisable to get involved in your industry at the local, state and national levels, says Abrahamson. As incoming chair of AH&LA, he’ll seek to further fortify such relationships.
“Supporting and participating in efforts to strengthen our industry make my day job and everyone else’s easier and more effective,” he says. “It also makes our businesses more successful. We all win. Our industry thrives when we are united, speaking with one voice and one vision. I’m excited to take the helm of AH&LA as chair. We have so many opportunities before us, but also many challenges. It’s more important than ever for everyone in our industry to remain engaged and involved because together, we are stronger,” he says.
With momentum and positive hotel performance set to continue into 2015, above all, “We are in the people business and the people our industry employs, love what they do. You have to if you want to be successful in hospitality. The most crucial element is passion—we are all incredibly passionate about what we do and the people we serve,” says Abrahamson.
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