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More NYU conference takeaways: Deloitte

Rethinking the midscale hotel segment, investing in game-changing technology and welcoming a rising, global middle-class of travelers were among the key discussion at the recent NYU hotel investment conference, according to a new report from Deloitte.

Debate over U.S. political issues related to travel were also front and center, including infrastructure development, regulation, tax reform, and travel restrictions.

Here is a summary of Deloitte’s takeaways:

Win at the property level. Hoteliers looking to the market to deliver value appreciation may need to by patient. According to STR, hotel market appreciation will idle between -3% and 3% over the next five years. Strong pipelines may be at least partly to blame.

Hoteliers in search of greater returns could benefit from differentiated offerings and customer experience strategies at the property and brand level. Doing so may help hotels cash in on the growing “experience economy.”

A midscale boom. Upper-midscale hotels are dominating the strong U.S. construction pipeline. Just over 200,000 upper-midscale rooms currently sit in the pipeline—well ahead of the upscale segment.

The recent design-led, technology-enabled, experience-driven focus of the industry has largely been applied to upmarket accommodations—leaving the midscale segment often an untapped opportunity in terms of an experience overhaul.

Game-changing tech. Getting hotel technology right is typically becoming more difficult with each passing year. One major hurdle? Separating the ‘shiny new toys’ from the more practical innovation capable of driving meaningful (and scalable) value for travelers.

Many hotel leaders, however, regarded Artificial Intelligence (AI) and the Internet of Things (IoT) as ‘game-changers’ amidst a growing number of technology platforms. Both technologies are commonly valued for customer-facing and back-of-the-house applicability.

EX versus CX. Today, corporate hotel dollars are often weighted strongly toward customer experience (CX) and digital investments. This typically leads to underinvestment in employee experience (EX), which can create an imbalance at the point of experience.

In light of this gap, investments in employee engagement have likely never been more important. A hotel’s commitment to EX can have considerable reach and strategic value, both as a driver of workplace satisfaction and as a profit-enabling initiative.

Embracing a global traveler pool. Many expanding global hotel brands are on a collision course with a rapidly rising, global traveler pool. The trend is often fueled by a rise discretionary spending in emerging markets.

Hoteliers should be ready to form new customer relationships. While many are eager to explore the world, the emerging middle-class traveler segment could be conceptualized as a blank slate, with little to no brand loyalty or travel habits.

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