One-On-One With NYU Hospitality Dean Lalia Rach: Enrolling Hotels In The School Of New Normal

Lalia Rach at the end of the academic year will step down after 15 years as divisional dean of the NYU Tisch Center for Hospitality, Tourism and Sports Management, though she will continue teaching at the school. She spoke this month to BTN hotel editor Michael B. Baker about the evolving role of both the travel manager and hotelier.

Business Travel News: Is the hotel industry recovering?

Lalia Rach: I've been watching what's happening with premium airfare. That says something to you about the hotel industry as well. We know that the bottom fell out of luxury in the hotel industry. We also know at the same time the bottom fell out of premium in the airline industry. Anyone who's a frequent flyer can tell you that, because the upgrades to the frequent flyers became regular.

We're beginning to see a very marginal turnaround in premium, but anytime you compare anything to 2009 and it's not double-digit better, you've got problems. I keep saying to the hotel industry and the travel industry in general: It's positive that you're seeing an upturn, but be realistic about what you're measuring that against. It was so disastrous last year that first-quarter measurement has absolutely got to show great rebound. It's still not enough. We know generally occupancy is rising, but rate is not.

BTN: It's still falling, in fact.

Rach: Yes. So, the demand/supply balance is out of whack. If we're just talking New York City, over the next four years, we have thousands of rooms coming, so it's going to continue to create this glut that will then continue to put the consumer in the driver seat. Luxury for airlines or hotels never went away or stopped. It just diminished. There weren't as many calls for the luxury hotel rooms, and if there were calls, it was being followed by, "and what will you do for me on rate?"

Business travel fully understands now that they can drive some things, and they're not going to let go of that. Will we go back to pre-recession? Everything is cyclical. We will go back, but it's going to be a slow go, and it's not going to look just like it did. There are some structural changes that have occurred within business models, and expectations that business has for expenditures, travel being one of those. That's not going to revert.

BTN: Do you mean the demand management practices they've put into place?

Rach: They are even going to get stronger. What do we know for certain about the next two decades, which is pretty far out? We know that information is the currency, information analysis. As technology improves and drives the ability to analyze and manage information on a more granular basis, the business models are only going to become more inclined to measure how you are following policy and procedure and whether that is giving the return you expected. That's not something we do quite readily today. That's where information management is going.

Are we going to return to the heyday of business expenses with no concern? No. It's not going to be business spending as usual. That's gone. It doesn't mean we won't expend money, but it's not going to be the "we've always done this" attitude, or "it depends upon your rank."

BTN: Does this apply to group travel as well?

Rach: Many meeting planners within their companies report to the purveyor department, and I'm suggesting they should report to the CIO. They are managers of information, the logistics being part of that, but logistics is not what drives a meeting. It's the information that's either disseminated, shared or whatever the right word is.

The position is about that currency that's going to drive company organizational success for a minimum of the next 20 years. Information has always driven it, but we're going to be able to know things in a targeted fashion: analysis as opposed to data. That's the huge difference. You don't have to be a scientific brain. You have to say, here's the analysis, and what does it mean for my area, my attendees and my travelers? That's a very different skill than procuring the right destination, which is important, but information should drive the position.

BTN: How will remote conferencing affect the industry?

Rach: There used to be conventional wisdom that said you must meet face to face. That is no longer true. If I am the head of meetings and travel for my company, is it not my job to know clearly the benefits of virtual presentation? Is it not my job to have experienced it so I can talk about the strengths and drawbacks? Again, this is far, far away from procurement, because we're talking about analysis.

This should be driven by the person who's in charge of managing travel. They're the ones who should drive the conversation, which should include information technology and senior members of the organization. When I talk to independent meeting planners, for example, I say this is another area of evolution of what it is you do, because you can help organizations and companies have a strategy around virtual meetings. I'm not talking about a document that sits on somebody's shelf and is three inches wide. It has to be dynamic and reviewed at best on a quarterly basis to see where the success and failure was, whether we're using it properly and whether it's driving the terms we expect.

BTN: Now that Marriott and Starwood are installing these suites in-house, will we see more hotel companies follow suit?

Rach: Now, everything we do can be done virtually. It's not something you have to sell. It's something you have to explain and help the client understand how it will improve their performance. That's what Starwood and Marriott will have to do. Otherwise, it will not be as used.

If you look at students in high schools and colleges , they're doing all kinds of virtual learning. This is not unusual for them. For someone over 35 who is not an early adopter of technology, you may have to do more legwork and explaining.

BTN: What about interoperability issues?

Rach: All of that is going to go away within five years. If any hotel company thinks this is going to be a proprietary moneymaker for them, the window is extraordinarily small. It's going to come down to service, the clarity of the transmission, the ability of the room to reflect the virtual and not to be shoehorned into the stereotype of the meeting room. The technology is the workhorse here, but the room is important as well. It's really the DNA of the experience that has to be thoughtfully analyzed.