AAHOA: Hoteliers Retrench, Eye Corp. Travel Amid Market Upheaval

AAHOA's Laura Lee Blake discusses: 

• Hoteliers' assessment of market conditions
• How hotel owners feel about the Trump administration's tariff strategy
• Staffing levels at member hotels

 AAHOA, the U.S. association of hotel owners otherwise known as the Asian American Hotel Owners Association, this month announced a new partnership with hospitality analytics firm Kalibri Labs to assess the effect of U.S. federal policy changes on market conditions. AAHOA president and CEO Laura Lee Blake, shortly after the conclusion of group's annual convention, AAHOACON, in New Orleans, this week spoke with BTN managing editor Chris Davis about how hoteliers are reacting to market changes and how they are approaching the business travel market. Edited excerpts follow.

BTN: What's the general tenor of your membership regarding current market conditions? 

Laura Lee Blake: We've had a couple events in the last several months, [the annual convention]  and our spring National Advocacy Conference in D.C. Across the board, we're hearing things are a bit concerning. In some areas, it's a little slower. They're not seeing the big bookings for the summer months. Ever since Covid, it seems like people are booking at the last minute instead of well in advance. Everyone is keeping an eye on it.

They were excited to hear that we are partnering with Kalibri Labs to track the data and report it to the members. They have more data than anyone else out there, and we'll be able to track that with them.

BTN: What was the impetus to form that relationship with Kalibri?

Blake: We've always had a relationship with Kalibri, and we go way back Cindy Estes Green. This all started because Kalibri came to us with an offer to help us do a certification program for our members on strategies for profitability and revenue optimization. Our members own more than 60 percent of all U.S. hotels, and they are the ones that need to be informed of this data. That was kind of the beginning of the conversation. Last year, she was at one of our hotel owners conferences and gave us a lot of great data about what was happening in members' respective areas, and we saw a strong response to it.

BTN: The first figures from Kalibri touch on business travel trends. How is that segment holding up for your members, including government travel?

Blake: On the one hand, if there's any good news, it's that approximately 30 percent of the market is trending up. We're seeing it a little bit in southern states with immigration issues, and there's also the disaster relief areas, including the California wildfires. The downside is that 70 percent are seeing downward trends, and it definitely covers corporate travel and definitely covers government cutbacks in some of these areas.

At AAHOACON, we had a panel on the future of the industry with nine different CEOs and top executives from hotel brands, and I sense the general thought is that right now there is uncertainty about what the future holds. And anytime there is uncertainty, people are not booking expensive travel. They're rethinking, No. 1, whether they should do it at all, and No. 2, they're waiting till the last minute to book, then they're keeping careful track of the cancellation date if they need to bow out.

That's the general trend, and the thinking is, it's probably going to be a bit of a tough year.

BTN: How are your members so far inclined to react to this? Is this something they think is going to blow over, or is it time to start implementing cost-cutting initiatives? 

Blake: I'm hearing a variety of different things. April 2 was the announcement of the tariffs. I hear from some members that this is going to have a significant impact on their business, and they're highly concerned. I've heard from others that they are confident that in the long run this is going to be better for the economy and better for the U.S., but also knowing that maybe for the next year or two there could be some challenges.

I think everybody's battening down the hatches and figuring out what can we do to stabilize things and look at cutting costs. That's one of our goals for our membership this year: profitability and ROI. We announced at AAHOACON that we're doubling down on putting money back in their pockets, and that's one of the reasons that we are partnering with Kalibri and putting together this educational certification program on profitability and ROI. Our members are living this data, and they have to address it accordingly.

BTN: For the last several years, coming out of the pandemic, there's been a focus on hotel staffing. Do your members generally feel that they are adequately staffed at this point, or does all this change that?

Blake: We continue to hear problems with labor. It's just there's a labor shortage out there, and I think now enough time has passed that everybody's tried to figure out how can they make this work, everything from having their parents come in to monitor the front desk. It truly is a small, small business and family members are involved.

They are also looking at some [new technology] trends. If you've seen the kiosks that have a live person on the other side of the screen, a number of our Members have invested in this. If they don't have the people that they need, I am hearing increasing discussions about use of technology and other efforts. 

Everybody continues to struggle. They're paying more—labor expenses have definitely increased, way above the minimum [wage] for many of them—and still they cannot attract enough. It continues to be a challenge.

BTN: Has the association taken any position on any of the recent federal government actions, and are there any advocacy efforts happening on that front now?

Blake: We have not taken a specific position on the tariffs. We've approached it from a perspective of trying to do a study on what it looks like and talking to our vendor partners on what are they seeing. What does this mean for their business? And one of the reasons is, of course, the headlines seem to be changing so frequently, that we've said, let's wait and see how things stabilize before we do so. That's why we've also partnered with Kalibri, so we could pull together the data to figure out exactly what type of impact this has.  

We had our spring national advocacy conference in Washington, D.C., a month ago. Some of our points were things that this administration is addressing, everything from tax reform policies to advocating for additional support because of the labor shortage. 

Another of our advocacy points is the Credit Card Competition Act … which would call for increased competition with MasterCard and Visa, and with the concept of increased competition usually means better service and better rates. Projections are, projections if this were to pass, retailers could save  hundreds of thousands, if not millions or more, on an annual basis because they pay so much in these credit card swipe fees.  

AAHOA celebrated its 35th year anniversary this past year, and it also was the first time ever that we were largely responsible for helping to have legislation introduced, and it's called the Lions Act, which would increase the loan limits from $5 million to $10 million for Small Business Administration section 7(A) or 504 loans.

For the tariff issue, we'll continue to monitor it and determine our next steps.