Hotel Management’s 5 Questions with…Thomas Magnuson
January 20, 2016
1. How will the hotel industry fare in 2016 in terms of overall operating metrics and profits?
Industry ‘averages’ can be dangerous for hoteliers because they distort expectations. Once you have removed the top six markets and luxury segment, U.S. occupancy average is actually 56 percent with $64 ADR, not the 62 percent and $110 ADR we are led to believe. Most hoteliers can see a 10 percent profit by concentrating on realistic rates, reviews and cost reductions.
2. What specific or significant goals have you set for your company in 2016?
Our goal is to offer lowest cost brand conversion. In 2016, thousands of U.S. owners may be squeezed out of the market via the arbitrary brand-cleansing PIPs of the major franchises. If we can help the owners survive and share in the top-line industry growth, that’s a good thing for the owner, their employees and their communities.
3. What challenges – within the industry or within the world at large – have the possibility to upset the current general optimism within the industry?
Instability and the fear that comes from it. What rural town could foresee the oil crash? Now terrorism has become a global industry. Coping with instability and fear starts with fixing the fundamental things we can control; quality, rates, reviews, service. These actions will build momentum, a sense of control and then confidence. Confidence is everything.
4. In 2016, where are you concentrating your company’s growth and expansion?
2016 is our year of global growth. Magnuson Hotels will be exporting our brands across 50 countries in 2016 via a new global distribution platform with Jin Jiang – China’s largest hotel operator, and Louvre – Europe’s largest hotel group. The Jin Jiang, Louvre, Magnuson consortium represents 6,000 hotels and 600,000 rooms, the size of a top 5 global group.
5. What areas within the hotel industry will deserve the most attention in 2016 that may not be on the radar now? For example: Labor issues, government/economic issues, etc.
Technology firms that feed off digital fear. We’ve been overwhelmed with countless unproven technologies. Will I fall if I don’t use Facebook, Twitter, Instagram? What if I don’t have the newest revenue, reviews, content software? Work with a low-cost brand, key OTAs and focus on the basics. You will be OK.
In five words or fewer, give us your overall outlook for 2016.
“Everything starts today”