Given the strong travel recovery (with the exception of large group conferences and a few individual markets like DC) the hotel industry has been able, short term at least, to turn the operating paradigm of "it's easier (and cheaper) to keep a customer than to find a new one" on its head. With the flow of the new target audience everyone is drooling over (millennials), the explosion of the Asian consumer, and the return of the business traveler combined with the lucrative opportunites of financial deals (new market development and acquisitions financed by historically inexpensive debt) it becomes clearer to see why elite offerings of loyalty programs have declined over the years, especially once competitors realize, "everyone's doing it". The ROI is more in how you structure the deal more than how you operate the business. The term 'operate the business' is being redefined, similarly to the successful (as defined by shareholders, not necessarily customers) transition of the airline industry. And similar to Budweiser and Miller/Coors brewing 'craft' beers, the hotel chains are eager to offer 'boutique' properties (where you pay for what once was provided before as service).
Thanks much for the article, now I can explain to my wife why she couldn't get room service at the Midtown Hilton back in July. Her comment was "this sure will keep me from returning, back to Marriott regardless"!
A very nice commentary as well erc, looks like someone got up very early and deep into the coffee this morning.
Blackstone bought Hilton right near the peak, so they had to hustle to make the deal work; the returns were in re-financing and working the real estate assets and they did an excellent job. Taking it public again next quarter on NYSE listing as HLT (Marriott switched over to Nasdaq to save a couple hundred grand a year in fees).
Morning, especially during holidays is my only 'free time' - well, speak of the devil, here comes the gang, a wonderful interruption. Happy Thanksgiving to all.