Lindsey Ueberroth, CEO of Preferred Hotels & Resorts shares her experience and vision of the sector in this time of crisis. An interview with Vanguélis Panayotis, CEO MKG Consulting.
You have many hoteliers that are operating under your brand: when the situation occurred, what did you tell them first?
When it hit our Chinese hotels very early this year, it seemed like a contained situation. But when it became apparent that it was an epidemic, one of the first things we did was to record a video message. It went to our hotel partners, as well as the travel industry and other partners we work with. It was a message from me expressing our concern, our support, our gratitude and the fact that we were confident we could manage through this situation together.
Do you already see some signs of recovery in some regions?
We do. It’s funny because when I woke up this morning, I read emails from our hotels partners in Europe because we received the Travel + Leisure World’s Best Awards. We won “Best Hotel” in destinations such as Italy and London and started reaching out to tell them the good news. Things are getting better.
China was the first country to benefit from recovery, but it was exciting to hear from hotels in Ireland and Spain – especially the resorts which are doing much better. They are running 50 to 60% occupancy rates which is great to hear. I think that they are expecting that’ll be the case throughout summer but then there’s a bit of a question mark as we hit October and fall. Hotel partners are a little worried because we don't have as much visibility on what's going to happen.
Will this crisis emphasize the added value that a brand like Preferred Hotels and Resort provide to their partners?
I think independents in many ways can manage through this better than some of the chains, partially because it's a different fee structure set-up. What is our goal when working with independent hotels and small hotel groups? We give them all the sales and marketing infrastructure and we have I Prefer - a global loyalty program that is one of the key drivers that support hotel bookings. The time has come to tap into that loyalty base.
This closed network is able to offer special deals and value-adds. We spend of lot of time talking to our hotel partners to really understand how they feel and what they need within their market. For us, it has always been a very consultative approach because we have a global footprint. We have been able to pivot and take advantage of that structure to help our hotels.
One of the exciting services that we launched – almost two years ago but it is really hitting its stride now – is PHG Consulting. This was a new division that was launched to provide ancillary services to our hotel partners. When you are independent, it is either overwhelming to find certain services or you do not need them on the same scale. It can be everything from public relations and social media support to revenue management for hire – maybe you have lost a revenue manager on property and you are looking for somebody to bridge that gap for a period of time. We are also seeing a lot more demand in renovations and reopenings. But how do you find somebody that’s going to provide that support and that checklist? Right now, that’s really critical. Hotels have closed and, in many cases, they’ve had to furlough or lay off a lot of their associates. As they are ramping up, they are trying to figure out how many people they can bring back? And we are able to provide those services for them from a more temporary standpoint. They might need just 4 or 6 months versus two years in many cases. That’s been an exciting thing for us. To be able to provide that level of support for our partners, in addition to our core services.
Everyone agrees that this pandemic has accelerate some trends like the “Green trend”. You’ve acquired a sustainable tourism consulting company (Beyond Green Travel) that goes in that direction. How happy are you about this move?
It really felt good to have something positive to announce during all of this. Ironically it was an acquisition that we made back in February, but it hit right during the middle of this crisis.
The founders Costas and Sally Christ are an incredible team and we are thrilled to have them be a part of the Preferred Family. They have been focusing on providing consulting services to countries, hotels, and travel related companies on how to really support sustainable tourism. It goes well beyond just sustainability on property – it’s about three pillars linked to heritage, culture and community.
They are a great organization. We have plans in terms of how we are going to grow and expand. It’s been great to have them come on board because they can support our hotel partners and our destination consulting side of the business. There are a lot of countries and destinations that are looking at the numbers and seeing how tourism has grown and how it supports economies. It’s really important that we can sustain that. I think that there will be more travelers than ever as we come out of this pandemic and the concepts of wellness, sustainability, people and places are going to be important. I think that people will think differently about how they travel, why they travel and the impact that they are going to have when they do.
What in the hotel industry will change because of this pandemic?
I think that a lot of operational changes that have been put in place, whether it’s using your phone to check in and check out or some of the health and safety measures taken - they can be permanent, but in some cases, it might be up to the customer to choose. Some people want to be checked in and have a conversation with somebody, and others don’t. The technology that is coming into play to limit contact is a good thing, but I think that the customer will ultimately decide how they want to use it and if that is the experience they want to have.
For travel in general, the health focus is probably a good thing in the long-term. There is a lot of other times of the year, for example with the flu for the corporate traveler, where it could be beneficial. Of course, we all hope that wearing masks doesn’t last forever and that as soon as it is not a necessity, it will go away. But I think for the most part, a lot of the changes that are being made are positive and has forced our industry to rethink, reimagine and get creative.
How do you see the growth in your network? Do you believe it will be on the hold for the next 24 months?
Some of our greatest growth as a company has happened during economic downturns or crises like this. Sometimes when times are good, hotels don’t think they need you. But when the times are bad, we’re a great partner. I think that hotels see our strengths, so our development pipeline has been very strong. That’s been a bright spot during this time period, and we’re seeing growth globally throughout Europe, the Americas and Asia. It has been really exciting for us just to see our footprint growing.
In Europe, what is the area you would like to have more properties?
Areas that we would love to grow or markets where we think that we’re underrepresented would include Germany. I think France would be a great example of another country where we would like to expand – probably outside of Paris, in some of the secondary and tertiary markets. That would be true in most European cities. We have got wonderful footprints in the major cities, but we want to grow in the secondary and tertiary markets where the leisure traveler stays because they fly into a major market, spend a few days there and then they want to explore. It could also be true in Scandinavia, an area where we didn’t have anything three years ago. I think that there are a lot of destinations like Portugal and Spain where it would be great to expand. Actually, my regional teams have a long list of markets that they’d like to see us grow into!
Do you have plans to launch new brands or new services in the coming months or years?
The short answer is yes. I think that as a travel company, we are always looking at potential acquisitions of businesses that would help provide valuable services to our hotel partners. As it relates to launching another brand, I look forward to talking to you in the fall. We already have a beautiful existing portfolio of hotels and now is about how to segment that and really tell that different story.
What’s your brand promise?
Our brand promise is always to ‘Believe in Travel’ and I could not feel more strongly about that then I do right now. I think there is a lot of pent-up demand for it and I think that as we come out of this, we are going to see the travel industry have a strong recovery.
The other thing I’d say is recently we launched our new development campaign, which is all about ‘Freedom’ – when you are independent there is freedom to it and the freedom to travel. I think it resonates not only for the company and the brand, but in general. I think that when we are able to really roll that out, it’s going to be fun because the freedom to travel and belief in travel are really going to provide inspiration.
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