As part of the Americas Lodging Investment Summit’s Patron sponsorship program, ALIS organizers asked Aimbridge’s Michael J. Deitemeyer eight timely questions as we prepare for the 22nd annual event January 23-25, 2023, at the JW Marriott/Ritz-Carlton Los Angeles L.A. LIVE. Following are his responses.
1) How has inflation and the threat of a recession affected property operations in the U.S. hotel industry?
Aimbridge Hospitality’s excellence in operations unlocks value for our owners and generates outsized returns, and our experience prepares us to meet any moment through the ups and downs of economic cycles. We’re already operating leaner and more efficiently in part to the pandemic but also due to our economies of scale and investments in technology such as automation. We focus on preparation, growing the top line, and hands-on management, which are all critical factors for protecting margins for our owners in any cycle.
2) What has been the biggest lesson learned during the last 2.5 years when it comes to hotel management?
The opportunity is really about our people. Our people make all the difference and I’m proud of the Aimbridge team and all that we have accomplished together. This year we had in-person conferences with our General Managers and sales leaders. Providing our associates robust training, investing in their growth, and just as importantly, investing in the active support and tools they use to be the best is part of our commitment to providing a place they can grow, succeed and belong. With many first-time GMs and Directors of Sales, Aimbridge differentiates with our robust support system. As an example, we have our in-person GM Connect at headquarters, bringing in new Aimbridge GMs for training to understand the resources available and build a peer network. It’s been a great success, and we’re adding a program for new Directors of Sales as well.
3) How have guest expectations evolved over the past year, and how do you expect them to change going forward?
Customers’ preferences are evolving as they are out traveling again, and we are focused on how we can create memorable experiences and meet them where they are now. As group and corporate travelers return, their expectations are full availability of amenities at the properties, including food and beverage. For us, it is about recognizing and listening to what guests and customers are asking for and responding to that.
4) Aimbridge’s recent realignment created six operational divisions, including four that cover vertical expertise—full service, evolution lifestyle, enhanced select service and select service. Based on your portfolio and what you’re seeing throughout the industry, what segments are performing best? Why?
Luxury and Economy—the two “bookends” of the hotel category spectrum—experienced strong performance in 2021 and are continuing to perform well this year. However, we’re seeing the best performance year-over-year in our Full Service division, with an emphasis on group and corporate travel.
5) The other two divisions are EMEA to expand beyond the UK and Europe, and LatAM to build from a strong foundation in Mexico. Why is it important to have a global footprint and reach into some areas where management contracts aren’t all that common?
As the brands continue on an asset-light course, third-party management is more important than ever, and institutional investment communities are driving the global need for third-party management outside of North America. Aimbridge has a true advantage in global third-party operations. We launched the business in the UK with small M&A deals that have fueled our growth in Europe. We now have a similar situation in Mexico and expanding throughout Latin America. We recognized the importance of having a unified global identity and integrated the Aimbridge corporate identity with our EMEA and LatAm divisions to more fully tell the story of the Aimbridge advantage.
6) How has Aimbridge traversed the labor crunch? Is there a way the industry can overcome that issue any time soon?
Aimbridge has been able to have a competitive advantage because of our daily pay and shift-share programs, which allows us to offer a flexible environment focused on financial well-being for added appeal, especially with Gen Z and those who might be interested in gig work. We made daily pay a key offering to our employees, and over $10 million in wages has been accessed ahead of regular pay periods—and interest for this continues to grow. We’re investing in our leadership development, internships, apprenticeships, and training in other soft skills to attract and retain people. As a people-first company, we make sure we talk about the importance of our culture and investing in our people. Our commitment to fostering this culture creates a strong team and a place where we do our best work. As an industry, we need to tell the story of resiliency and opportunity.
7) What’s the most under-estimated challenge the hotel industry faces, and why?
In reality, the workforce has been changing all along; the pandemic just accelerated those issues, including a declining population growth rate, an aging population, and a shrinking workforce. So, the size and scope of the labor crunch are underestimated as we have this big demographic shift happening and are just now starting to see it. As an industry, we need to promote hospitality as a great place to have a job and a career. Within Aimbridge, there are people who got their start in the positions like housekeeping, food and beverage, and guest service roles, and we need to continue to tell those stories to show the value of both lifelong and life-stage career potential.
8) What’s the most under-estimated opportunity for the hotel industry, and why?
Our greatest challenge is our greatest opportunity—the people make all the difference. Hospitality is a great place to be, no matter where you are in your life. Aimbridge focuses on talent, training, and development at every stage of someone’s career journey. The sky is the limit with Aimbridge and in the hospitality industry.
* as of September 1, 2022