GMH Hotels: The Week Hotel Owners Won.

0:00ZS is a global consulting and technology firm that partners with companies to improve life and how we live it. Working with the world's top hospitality brands, ZS brings together data, science, technology, and human ingenuity to transform ideas into customer loyalty. They're ready to help you elevate guest experiences, improve operations, and uncover preferences and motivations through their AI-powered solutions. With more than 1 ,700 clients in over 170 countries, ZS has built the expertise, fortitude, and vision to help you deliver impact right where it matters.

1:04Sarah Dandashy: Well, good morning. Good morning, Sarah. Good to see you. Oh, good to see you too. And apologies for everybody behind the scenes, by the way. I know we're a little late on coming on our live. I was actually having technical issues here. So I got my little trusty headphones in. Don't judge. But we're good. We are up and rolling, but it's nice to see you. Thank you for holding us to our standard here. Yes, I paid the internet bill. I was having internet connections earlier. Some trouble with them, but we're here, Lou. We're here. I know that it's all three of us in this room. It's always good, but we're here.

1:46A great Wednesday. That music always gets me pumped up and excited to chat with everybody. So if you're watching, let us know where you're watching from. We always love talking to the live viewers and putting your comments up here on the screen. Always a blast. But we didn't really connect that much this week at all. Where have you been? I know you were all over the place.

2:03Sarah Dandashy: Yeah, I was actually, I spent a good amount of time, almost like over 10 days on the East Coast. I was in New York and then I was also in Pennsylvania. Actually, that's where I did the show from last year or last week with my grandmother turning 97. So I got to see family in New York City, got to see my grandmother in good old Pennsylvania your corn country. We eat so much corn. By the way, is this like not a thing? Like when we, when we will have corn dinner where we just like eat like corn, like we eat like four years of corn and like some other things, but we mainly have corn. Is that like not a thing?

2:37I don't think so. If I remember correctly, corn doesn't have any like true nutritional value. Correct. Maybe I could be wrong.

2:44Sarah Dandashy: It's so good. It is so good. Oh, let us know here in the comments here If you're having a cornbread, some corn, you know, we can put all the different kind of corn, corn casserole. It's like in that scene with Forrest Gump, right? With who he talks about all the shrimp, right? Oh, my gosh. That's crazy. All right. So what about you? Any corn? Well, quiet. No corn this weekend. I had a lot of travel for myself, but we're getting a puppy. So he's prepping for this puppy that comes this Saturday, which was unexpected. it. I was supposed to get it in two weeks, but they're bringing it down early. I'm like, Oh, I got to get ready.

3:22So it reminds me of having a kid again. Like there's so many things. I got overwhelmed. I was walking into the pet store. I'm like, I don't know what to get. There's so many different things available here. So for anyone out there with puppies, let me know some success stories here. Send me some messages. I would love to hear some tips because I do have two kids. I'm like, how much harder could it be than raising kids? But everyone's like, get ready.

3:42Sarah Dandashy: Different, different. Catherine Frederick is joining us and I bet you she's going to give you a whole slew of yep all right i would need those tips i know that i got a puppy coming yes i got a sheep-a-doodle on the way his name is rider so rider may be joining some shows here soon i love it um well so i know that we start a little bit behind schedule so why don't we dive in but before we do uh wanted to go ahead and just uh do a little bit of a correction from last week So, you know, we are human here. And so when we get things wrong at Good Morning Hospitality, we always want to be the first to tell you.

4:19Sarah Dandashy: So last week, we mischaracterized Travel and Leisure's business model. So the company is an established vacation ownership manager. So it's not a new entrant into the space. And it uses a points-based model instead of a one-week-per-year system. So I want to just apologize. We regret the errors. And now on to our show. Yeah. Thanks for watching, Travel and Leisure. We appreciate you watching. And, you know, let's get on to the show here. We got some great things going here. But first, Sarah, but first, this episode is brought to you by StayFi. StayFi helps short-term rental operators build direct guest relationships through branded Wi-Fi portals, email marketing, and guest data tools that turn one-time bookers into repeat guests.

5:07So start growing your direct booking revenue today at stayfi.com backslash goodmorninghospitality. And that's stayfi.com backslash goodmorninghospitality. Love doing those.

5:19Sarah Dandashy: There you go. Thank you, Luke. Thank you. Yes. Add time. Awesome. Well, why don't we go ahead and jump into our first topic here. So Marriott launches owner rebate program ahead of$125 million credit card fee jump. So Marriott is launching a rebate program for hotel owners. and it will basically pass through to franchisees starting in 2026, which is now. The rebate is designed to offset some of that cost to owners who hit specific performance benchmarks around guest satisfaction, quality scores, and loyalty enrollment. This is interesting because this credit card fee increase is a direct consequence of Marriott's Amex co-branded deal expansion.

6:06Sarah Dandashy: So Marriott collects base at significant revenue from the partnership, but they've also historically passed a portion of the program cost to franchisees. So why this is big is the$125 million jump is the largest single-year increase in recent years. A lot of people are using those credit cards, but this is tied to two different things, right? It's almost like in this article, and Sean did a great job, O 'Neill, writing this article. He kind of has a section there of why now this is happening. So we'll start with that part. It's in March, 51 owners representing 990 hotels. So that's roughly 182 ,000 Marriott rooms sent a letter, which is gift obtained, to the CEO, Anthony Capuano, and said they want help.

6:52They need help here. They want a piece of this credit card revenue, that they have costs that are going up. They have expenses that are going up, and they're not seeing a benefit from it. So what the CFO said is we're going to give back up to 50 basis points of gross room revenue fee reimbursement for achieving defined thresholds. So they have to start by earning good customer scores to be able to get to this 50 basis points. And so what that means, it sounds like something fancy, but basically it's 0.5 % of the room revenue. Right. So, yeah, I did a little study. I went back and looked like, how much could this make?

7:27I mean, depending on the size of the hotel, I did an average room size. It could be anywhere from$60 ,000 to$100 ,000 to$150 ,000 given back, which is right to the bottom line, which helps pay for salaries and insurance and things. But it's not a gigantic number, but it's something to start with. But I don't think this is going to go away. The more and more of these credit card fees go, the more and more of the fees that the big brands make, I think we're going to see a lot more of the hotel owners saying, hey, we're covering the cost of everything going up. We want some more of this as well.

7:57Sarah Dandashy: Exactly. And so, and I mean, with this also happening with Hilton, obviously Marriott Hilton, this happening at the same time, it's clearly indicative of a larger industry shift. So I can tell you, it's just everything's getting more expensive. As we manage the management company, like we start looking at things like all of a sudden, every single one of your supplies gets more expensive. Every single one of your insurance, your labor, the water, the electricity, everything goes up in cost. and when you're not getting any relief and you see the management company you're partnered with making a lot and making record numbers, you're like, hey, we're the owners here of these properties that are working with you.

8:35Where do we get to see some of this? So it's going to be interesting to see how many more owners start to team up because when you get 51 owners representing that large of a block of their rooms, I think you're going to start to see more and more talking about it, especially with all the news coming out and people reporting on it.

8:52Sarah Dandashy: Totally. Which, by the way, this should kind of go into the next topic, which is where we are. Hilton is cutting fees to rebuild hotel owners' margins. So this article also came out. So they announced, Hilton announced fee cuts across seven of its brands aimed at improving owner margins, just as we're talking about, especially at this time when operating costs. So that's, again, it's really interesting seeing that we've got the two larger brands are really making active changes to make sure that, to give a little bit of that relief to owners. Even if it is a little, you know, again, it's a nod in that direction.

9:30Yes. And Hilton's tying it to the program they're calling Rise. And so Rise is, again, customer satisfaction. So 50 % of their hotels qualify now based on their customer service scores. The other 50 % of Hilton's hotels don't qualify. So you really need to qualify to be a good, you know, hotelier, that you're a good owner, that you're investing in the property, that your guests are having a great experience to qualify to get this rebate. So, you know, both companies really making a big push saying, all right, we'll give up some things, but you have to make sure that that guest experience stays high, that you're not just cutting expenses to cover, you know, the rise, like you got to invest in the property and we'll help give back and give you more.

10:10So it's going to be interesting to see. And we talked a little bit last week or last week or two weeks ago about Citizen M. And this kind of made me think about it. Like, all right. Yeah, I don't want to work with Marriott. Someone could say or Hilton or a big flag and I'm going to go on my own. But then you look at Citizen M and 50 % of their bookings are coming from that Marriott engine. So it is a great benefit to being a part of that big flag as well. So there's gives and takes, which I understand. And being an owner now and developing a property, you have to figure out, all right, what do I want to give up?

10:40to ensure that I have a consistent room revenue, consistent base of guests while taking on these costs. But it's a good look to say, hey, we're giving back and we want to be a team player, but you also have to give good customer service. So it's really interesting to see how this is going. We have some people commenting here. Lonnie Wolf saying, in the house team, the half percent. Taylor mentioning costs are going up every day. The exact reason we created integrity. I got to check out integrity. Brian Fish, investing in the property is the big one. They are defaulting more owners due to delayed renovations.

11:19And this is their way of dangling an incentive. I think you nailed it perfectly, Brian. And it's what's happening, right? So, all right, you can't keep cutting, cutting, cutting on all the services and re-investing into the property and making sure guests are doing a good job. We'll work with you and we'll help give money back. But you also have to make sure the customer or the guests are having a great time. So it's going to be interesting to see how this continues to play out because there is more and more brands coming in, more and more companies that are trying to renegotiate. We talked a couple of weeks ago where I think it was like 1 ,200 hotels may not even renew their contracts.

11:52So it's an interesting time right now, especially with the business environment and what's going on out there with, you know, that mid-scale hotels, you know, really kind of struggling and the extended stay growing and the ultra luxury growing. what's going to happen in that in between. And that's where most of these owners are at.

12:10Sarah Dandashy: Yeah, no, that's a, that's a, it's a very great point. It's interesting times indeed. So why don't we come to our next topic here? Club Med. So this is kind of cool. So Club Med's premium pivot shows what commitment actually looks like. So this is actually kind of a cool thing. Yeah, check it out. So recently, so Club Med, they posted revenue growth of roughly 12 % year over year with average daily rates of up to 18%, driven basically by a decade-long commitment to exiting the budget all-inclusive space and repositioning more as a premium resort brand. And what was actually really exciting is they just did a groundbreaking.

12:54Sarah Dandashy: That's what that picture was from in St. Right? Yes, exactly. which is part of the U S Virgin islands not to be mixed up with the drink. And, and so, yeah, so it very exciting to see kind of what they're doing, but we've talked about this for quite some time as far as like the industry and where all inclusives are moving towards it, certainly becoming more of having more premium options. And yeah, it's very great. I like it. Look, I have never stayed at a club med, but you know, everyone knows that name. If you know, I think the Caribbean, Yes, you do. In the very 90s, like, all right, let's go out there to Sandals and Club Med and these places.

13:35But now they're pivoting. People want that experience. I think cruise ships have helped people realize they like that kind of environment. Totally. And kind of pushing upscale. And so with Club Med now, again, where are they going? That ultra, not ultra luxury, but luxury segment. They're pushing their property nicer and nicer. They're investing a lot of money. They really want to get a piece of that business. And I love that they're coming to the U.S. for the first time. It's not continental U.S., but the U.S. Virgin Islands, where I was two weeks ago and fell in love with, I've been dreaming about going back.

14:05Right.

14:05Sarah Dandashy: It's so magical, and it's great. I mean, it's part of the U.S. I did a post on the U.S. Virgin Islands and British Virgin Islands, and a lot of people were like, do not talk about it anymore. We want to keep this quiet. So I posted a little video of going to the British Virgin Islands, to the Soggy Dollar Bar, and I got a lot of views. I was shocked to see how many people were commenting and sharing and reposting. So, you know, it just shows that travel influencer. I got I'm trying to compete with you. I'm trying to get my follower count up, everybody. So come on over and follow my one video that did well.

14:39But no, it's really cool to see what they're doing. We just had a friend of ours that we know that went to an all inclusive and did not have a good time. So we want to make sure that when people get to try this, they have a good time. And I think with Sandals leading the way and Club Med and a lot of other major chains, Like we talked about the Marriott's of the world, everyone getting more into it. I'd be really interested to see where this goes because it's a very different model than a traditional resort. It is.

15:05Sarah Dandashy: But I have to say, yeah, people love it. And just, you know, even like with my travels prior to 2020, I personally hadn't really been to that many all inclusives. And then after 2020, I've worked with many different brands and even was just that one earlier this year. And it, you know, when it's done right and it's done at a premium level, it's actually great. I actually just saw somebody was posted, somebody posted a video on Instagram and they're talking about this, this interesting thing with, with like, if you're trying to do luxury or like premium, people don't want to do math. and it's that sort of idea of like oh well if you stay here then you get this credit or that credit and that's what you don't have to worry about that in these these all-inclusive these higher end and you know it's covered and it is what it is and if you want to go off property that's a whole separate ball game but on property you know it just makes it easy that's true and live viewers i'm curious if you like going to all inclusives so let us know yes or no i'm curious just a quick live poll here to see if you'd be interested in going to a Club Med or Sandals or a place like this.

16:16Because I think we're going to see more and more of them as people really start to see how far their dollar can go. And once you're at a place, it feels good. Like, I don't have to worry about how much that drink is going to cost or this extra ice cream for my kids. Or, you know, I want to go to the buffet and do a little bit more. Like, it just continues to feel like, you know, I just recently did a trip and every time I had to pay for something, I was like, oh man, that price seemed to go up that bottle of water went from eight to ten dollars this time it's like oh man what can we

16:42Sarah Dandashy: do when you're when you're on vacation do you want to think about okay i'm really only going to have one margarita or i'm going to have three really right i know sarah likes four so but brian's saying they want to pay up front and no they aren't going to owe an extra 2k after the week is done i agree with you that's why i like cruise ships you know i had a friend of mine one of my business partners is how you like going on cruises he went on his first one a royal caribbean he's like all right i get it i understand now i see why you like it it was great experience fantastic so i think there's something for everyone out there in that all-inclusive world just try to make sure you go to the right place and don't have a bad experience with the one out there are we old enough i think we are we are we're definitely so long as you're over 21 i'm kidding for those margaritas that's what i mean lou does mostly all-inclusive cruises viking oceana celebrity with drink packages and so don't worry about expenses lou i agree with you i gotta start doing some of those more the next tier up from royal caribbean i haven't done anything above royal caribbean on a big cruise ship so i gotta check out the celebrities and oceanas of the world you know my favorite thing is like when you go to all-inclusives and like they and they do a good job and they've got that like they've got their little sweet store and it's like okay i'm gonna to get like some chocolates and some dessert you know it's the idea like it just is nice to not have to worry about it's like i want a cappuccino in the morning and it's yeah treat yourself treat yourself with some chocolate and a cappuccino going all out over here but but yeah again i think it i think it actually really helps with the whole vacation again that vacation mindset which i think from the guest experience um is is great so yeah i'm looking to see some more.

18:26So I appreciate the tips on the different areas and thank you live viewers. It's always fun to see what you're up to.

18:32Sarah Dandashy: By the way, maybe, maybe when Club Med opens, I think that they are going to be opening in what, 2027? Maybe we go. I think I'm down. I think we got some invites. Didn't we get an invite? I don't know. We can talk about that backstage. Someone sent us something. I remember. So we can talk about it. Yes. Anyway. So, all right. Well, let's go No, no, no. We were invited to the groundbreaking. So, but we were like, hold off until you're ready to accept guests and then we'll be there. Yeah, yeah. Cause that'll be, that'll be more useful for everyone. So, hi. So this one's interesting. Our next topic here.

19:07Sarah Dandashy: Hyatt is under pressure over delayed openings as it speeds up mid-tier buildout. So Hyatt is facing analysts and investor pressure over a higher than expected number of delayed hotel openings in its pipeline, which is pushing its net unit growth below the targets it's set for 2026. The delays are concentrated in the mid-tier segment, so where Hyatt has been aggressively building out its select portfolio. And this mid-tier buildout is intentional. um we've they've hi you know as we might know has historically been weighted towards full service and luxury which limited its you know addressable market for franchisees but um the select brands including high place the hyatt house they've been growing faster than the overall um sort of system they built out but um constructions and timeline construction's always challenging right You know this.

20:04It's very hard. It depends. And it has to be on point. You have to have a lot of people involved. You know, we reported, you know, I think it was last year, Hyatt went through a lot of different changes at the top of the company. And, you know, I can say just from knowing people within the company, there was a lot of different visions, but now they're starting to get back on track. And this is a big push to get those select brands, Hyatt Place, Hyatt House. They've been growing faster, but the construction timelines are just not keeping up and they need to get those rooms open because we have their competitors starting to do more and more in that space.

20:35Correct. And so, you know, one thing with owners is you need that property open because you do have, you know, loans you've taken out on the land, you have investors that you have to pay back. And the longer that stretches out, you know, people start to get a little antsy. And so you have to make sure you're taking care of all of those people. And that means getting those rooms open, getting the supplies in, making sure the standards in place, you know, making sure technology works that you can get the reservations booked on time and getting that open and you can't start accepting reservations if you don't know exactly when you're opening so there's a lot of pressure when you open a hotel have you done one sarah have you done an opening before at a property

21:11Sarah Dandashy: no i feel like i missed that i should have you should have but just for the experience it's never too late maybe when you're it was just my dream down the road i'm just going to be a host at the restaurant is like an 80 year old guy and just like say hello to people you're just gonna Stop it. Yeah, I think so. But anyway, part of the openings, that's what's stressful is like, you got to hit these dates because you promise those opening reservations. Hey, we're going to be open. And if you don't, you have to find them a place to stay. And a lot of times you're going to be covering the cost of that, not just like, hey, let me refund your money.

21:46because I've been in places that were opening recently that I was assisting with, and I kept pushing back the opening date month by month by month and canceling last minute on all these people, thousands of people. So it can be very, very stressful out there. Good old Uncle Steve hosting. Listen, there was a guy when I worked at Mandarin Oriental. I will never forget him. He was a GM of a hotel. He just wanted something to do. and he's like, Steve, I'm not going to make schedules. I'm not doing payroll. I'm not doing any of the busy work. I will be on the floor. Just schedule me these days and I'll make sure we get good customer service scores.

22:24And he taught me so much. I was a young 20 something year old. So I might have to do that, Lou. We'll see. We'll see. Anyway, Sarah, sorry. Too much cash.

22:32Sarah Dandashy: No, I love that. No, no, no, no. It's great. It's great. I love that because it gets, it makes, it reminds me of all the hosts that I've met over the years. But if you've got the hospitality spirit and you just kind of want a low-lift sort of job, I think that's fantastic. I kind of like that play. I was imagining. I'm like, what am I doing at 80? Maybe I'm just chilling at a club med. Let's see. Good idea. Meet you in St. Croix. Anyway, why don't we go on to, I think, your favorite segment. Not my favorite. Everyone's favorite segment. Everyone's favorite segment. Everyone's favorite segment is Whose Brand Is It Anyway?

23:15Where we put up a sub-brand, and we have to guess who is the parent brand. And I know all of you out here look forward to this every single week, and this is why you tune into the show. So without further ado, let's get up the sub-brand and see if we can guess the parent brand. Do we have it? is the question. Oh. Oh, my. This is AI. Who is this company here? Prize Hotel?

23:45Sarah Dandashy: Stop it. Prize Hotel. I would say Prize Hotel. I would say Prize Hotel. I'm going with, this has got to be a unique one, H-World. Can we talk about H-World? Wasn't that one of the companies we talked about in China? I'm going with H-World. Who do you think, everybody? Oh, wow. You've got five seconds to put in your votes. Oh, my God. I don't even know. A core by Lou. All right. We see some. Actually, you know what? I was going to say a core. Lou, I was going to say that, but you sent it in before me. I'll say a core. I'll go with that. All right. The time to reveal is now.

24:34Oh. Oh my gosh. Never even on my radar. Well, let's check it out. Can we put it on the screen? Can we see what it looks like?

24:43Sarah Dandashy: So it is prize by Radisson. I like it. Prize by Radisson. Prize hotels. All right, everyone. I want to see what the inside of these, I mean, like the rooms. Affordable high design. Prize by Radisson is a new generation of century located lifestyle led properties. Oh, look at this. Written by Radisson's eclectic character combines comfortable accommodation in an informal setting and surface culture. A lot of good social spaces. It kind of reminds me of a Citizen M vibe in a Yotel. Yeah, yeah, yeah. Yeah, totally. Very cool. We definitely do. You see? This is why I like doing this because we learn about all different kind of places.

25:24And it makes it fun to see, like, all right, I'm going to keep an eye out for those. Those rooms are kind of cool.

25:29Sarah Dandashy: The rooms are vibe-y. Look at that. That little fun situation there. I got to see where they're located because none close to me. Not yet. Very cool. Well, I appreciate you all playing. Taylor got it. Radisson. Yeah. Good job, Taylor. Good job. Great. And Lou, what do you think? Steve doing his special ad voice. I got to get the special ad voice on for that part. But, wow, we cover a lot here today. but it really just goes to show you hotel owners getting support from the big brands for Marriott and Hilton Club Med making their renaissance here coming back investing in upscale travelers love it and you know again another great show Sarah we always do a good job here we love having all the live viewers here and if you haven't yet please make sure to subscribe and of course send this over to a friend we did have a lot of fun here the more people we get in the live show the better we always enjoy seeing all of you here and until next week everybody stay hospitable

27:03ZS is a global consulting and technology firm that partners with companies to improve life and how we live it. Working with the world's top hospitality brands, ZS brings together data, science, technology, and human ingenuity to transform ideas into customer loyalty. They're ready to help you elevate guest experiences, improve operations, and uncover preferences and motivations through their AI-powered solutions. With more than 1 ,700 clients in over 170 countries, ZS has built the expertise, fortitude, and vision to help you deliver impact right where it matters.