Pamela Whitby hears how the US consumer is falling out of love with brands, the job title is out the window, and why HR is the most important function in hospitality today
Back in 2004, Sagar Desai, VP of Acquisitions & Development at Viceroy Hotel Group, spotted an opportunity while studying at New York University. Dormitories were only available for students until their sophomore year (their second year), and with parents living anything from a hundred to a thousand miles away, they had nobody to help negotiate their accommodation needs. Worse still, in one of the most challenging real estate markets in the world, landlords were inclined to take advantage. So, Desai started brokering accommodation for students and, through word of mouth soon found that he had a thriving business.
This entrepreneurial endeavour has stood him in good stead in today’s evolving and competitive hotel environment, where innovation and flair are increasingly required for success. Ahead of EyeforTravel North America, to be held in Las Vegas later this year, we spoke to keynoter Desai who identifies three important trends for hospitality brands to take note of in the modern world.
1. The rise of mobile and the anti-brand consumer
A growing millennial consumer base, and the children of those millennials, is one significant trend that is shifting how people buy everything from clothing to cars and holidays. “The demand profile of millennials is very different to that of baby boomers,” says Desai. For example, more people are mobile, and are using smart devices, not just to communicate but also to purchase their every need; at Viceroy, 50% to 60% of internet bookings today are made via mobile.
Against this backdrop, we are starting to see how brands are pivoting their strategy to cater to this. Take US retail giant Walmart, which has been snapping up technology companies to combat the growing threat of the most powerful online retail company Amazon.
They call it a brand new America. In fact it’s an anti-brand new America
So it would be “naïve to think that ‘I’ve been doing this for a hundred years and my brand will always stay true’,” argues Desai. And, in fact, they aren't. In the US, consumers are increasingly rejecting brands because it’s just not cool anymore. “Candidly, I think we are breeding a generation of consumers that are anti brand to a certain extent,” says Desai. This, he continues, is giving rise to so–called ‘soft branding’ from names like Marriott. With its Autograph Collection, Marriott still provides back–end support but has created a hotel with individuality and personality that is more aligned with what millennials want. “They call it a brand new America. In fact it’s an anti–brand new America,” Desai says.
2. The death of the job title
Desai may hold the title of VP of acquisitions at Viceroy, a relatively small and nimble luxury hotel brand, but he wears multiple hats. Doing everything from everything from operations to sales, finance, marketing and RM, a day in his life looks something like this.
"If I’m looking at new site today I’m thinking who is the new client – that is commercial. Who is the local community? That is marketing. Then, what about making money from this box; the cost to build, revenue generation and bottom line profit – that is finance. Who to hire – locals or expats, and what is the staffing structure? That is operations. I’m wearing all these hats and more. I’m also out on the road with our CEO selling the brand.”
Successful companies are throwing ‘job titles', that only serve to pigeonhole out the window, and are reducing bureaucracy and red tape to become increasingly meritocratic.
For Desai, successful companies are throwing ‘job titles', that only serve to pigeonhole, out the window, and are reducing bureaucracy and red tape to become increasingly meritocratic. This view is also held by theoretical physicist and former Thomas Cook executive Joerg Esser who has been drawing inspiration from research into the behaviour of ants and honeybees to create practical rules that can be applied by business leaders today. More on this in Ant-spiration: 5 simple smart rules for turbulent times EyeforTravel June 20, 2017.
Booking.com is cited as one example of a company that operates with such a flattened hierarchy and applies a rigorous testing and learning culture to challenge assumptions and truly understand customer behaviour. And this, says Desai, is what hotel companies should be aiming for too. “Lots of tech companies do A/B testing, and smart hotels today are doing the same. Why put up one website? Put up two and see which responds best, then iterate on that”.
Traditional hotel companies that don’t adapt to the modern, mobile, tech driven world are going to see their business increasingly eroded, says Desai, whose view is that within ten years they will be defunct.
3. The changing face of HR
“The most important function in hotels today is the HR function,” says Desai, who stresses that a good HR team is not just there to enforce rules, as many do! Monitoring whether a person has clocked in late or is not behind their desk is so "anti–growth", he says. Instead, HR people should be confidantes, even therapists, who help people achieve their goals and build confidence, and “serve as the moral compass of a company”.
Monitoring whether a person has clocked in late or is not behind their desk is so “anti–growth”
While being entrepreneurial and innovating is the name of the game, the reality is that in any company there is a need for both back and front of house people. In accounting, for example, there may not be as much room for flexibility as there is in more commercial, front–of–house roles. However, Desai recommends that companies let people write their own job titles to encourage more dynamism and flexibility in this fast–moving and competitive market.
Join us in Las Vegas on October 19-20 to hear more from Sagar Desai and other senior executives and innovators from brands that include Priceline, IHG, Lola, TTC and many more
October 2017, Las Vegas (USA)