“The economy is the greatest challenge due to inflation, interest rates, labor costs, and available capital for transactions. Beyond that, there is also a lot of brand proliferation in the economy and extended-stay segments. We’re staying focused on controlling costs and driving revenue with an emphasis on digital marketing because of the growing importance of the digital experience.”
– John Murray, President & CEO Sonesta International Hotels Corporation
The hospitality industry remains below pre-pandemic levels. What are your expectations for ADR, occupancy and RevPAR in 2024?
JM: We anticipate strong group but moderate leisure business, and expect business travel to take longer, likely not until the end of 2024. Our expectations are aligned with pundits seeing a 4 percent increase in RevPAR, but we believe Sonesta’s RevPAR will be a little above that, around 6 percent, from occupancy on average in the high 60s and rate growth.
What is your greatest challenge going into 2024 and what steps are you taking to overcome it?
JM: The economy is the greatest challenge due to inflation, interest rates, labor costs, and available capital for transactions. Beyond that, there is also a lot of brand proliferation in the economy and extended-stay segments. We’re staying focused on controlling costs and driving revenue with an emphasis on digital marketing because of the growing importance of the digital experience.
What steps are you taking to drive revenue and maximize asset ROI, and is it on the top line or bottom line?
JM: We’re taking steps on both the top and bottom line. We’re investing in improvements to our website, loyalty program and CRM platform to target the right experiences and offers to the right guests, which will hopefully benefit our managed and franchise hotels across all 17 brands.
In discussions with owners, what are their biggest concerns for 2024?
JM: Their concerns are similar to ours – how the economy will impact hotel performance. Additional top concerns are interest rates, how to finance properties, poor government regulation, and the possible impact of mergers and acquisitions, which collectively cause uncertainty and that leads to anxiety.
Labor issues and fluctuating occupancy are two operating issues going into 2024. How are you strategizing to operate more efficiently?
JM: We have a number of initiatives to deal with labor issues, including a streamlined hiring process, improved training, daily pay, and flexible scheduling, which is very helpful for staff dealing with child care. This type of scheduling combined with flexibility in housekeeping frequency and food and beverage (opening restaurants versus a grab-and-go option) allows us to deal with the ebb and flow of changing occupancy.
SOURCE: Hotel Management
