SIGNATURE HEIGHTENS EMPHASIS ON HOTEL & RESORT PROGRAM

Interview: Richard Lebowitz – Senior Vice President, Hotel and Resort Program – Signature Travel Network – at ILTM Cannes.

We began by asking Signature’s new SVP – Hotel and Resort Program to tell us a little about his background…

I started my career at the Plaza Hotel in New York City. It was a great place to start, because the Plaza is an iconic property on Central Park South and 5th avenue. I was there during its heyday before there were a lot of great other hotels in New York City. I was drawn to the hotel business because I came from politics – a political family. As a kid, I used to campaign for my father who held elective office and at a very early age I learned about service. And the hotel business is all about service. So that’s what drew me into the hotel business, and starting at a great place like the Plaza, my eyes were opened to the world. I was exposed to travellers and to different cultures. Fast forward, every opportunity provided me a stepping-stone for the next opportunity. I have a diverse hotel background. I was involved in food and beverage, in operations, and sales and marketing, both from an on-property perspective and from a corporate perspective. In hotel sales, I worked in a lot of segments – corporate travel, group/MICE, agencies, and so on. My most recent position before joining Signature was at Hyatt – regional vice-president for luxury & leisure sales for North America. We represented all Hyatt brands – some of them are luxury, some of them are lifestyle, some of them are premium, but that’s what people want – the same people have different needs every time they travel. Sometimes you want mid-price, and sometimes you want luxury. In all these experiences, I go back to my original roots when I was a kid in the service business, because basically in my view, you take care of people the way you’d like to be treated: dignity, respect, maintain eye contact, please and thank you. Hospitality is not rocket science, but you have to be genuine and empathetic. When someone would come to the hotel, maybe they just got off a plane after travelling for 14 hours, of course they’re exhausted, and now you have to greet them in a warm way – with a sense of arrival – a sense of purpose. I got to know Signature in my previous capacity because I worked with all the luxury consortia. I got to know a lot of the Signature members and the Signature staff, and it has been great to be part of the Signature family, because we are a community. We are very efficient, and we are member-focused. Everything we do is to serve our members as they are the owners of the network. Since our members are our owners, they help us drive this organization, through their ideas and their sales, but as owners, they also reap the rewards – amenities (to be delivered from their agency/advisor, not their consortia) and the overrides/profitability of Signature.

How are you applying your expertise from the past to what you are doing today?

I am speaking to hoteliers in a way that is familiar to them, because I was one of them for many years. At our recent conference, I gave a presentation to our members and I also gave a presentation to the hoteliers. I spoke not only about our hotel program but what is happening in the industry impacting hoteliers and the travel community. As one example, I spoke about RevPAR, which is the key metric in the hotel industry. For the members I feel it’s important they understand how hoteliers are measured and what drives decisions. For partners, I wanted them to understand we recognize the importance of how they are measured and say, “Hey, I know that you’re looking at RevPAR, and there have been some declines in the forecast for next year, or a steady but slow growth is forecasted.” I try to put things in context with regard to the challenges they are facing. when it comes to their distribution or marketing strategy or channel optimization. How can they drive loyalty without discounts? What are all the variables? We are an extension of their team, so I think I can speak to them in a way that shows I understand their struggles, I understand their goals, and we can work together for a mutual success.

After all those years at Hyatt, what were the key lessons you learned?

That everyone is different and that you have to take the time to get to know someone’s needs. You could be working next to John over here and next to Bob over there at the same agency, but each has very different books of business, and unless you take the time to understand what you need versus what he or she needs, you miss out. I think the space is not about mandated travel, it’s discretionary travel. In the group segment, a lot of it is driven by rate, space, and dates. In the corporate travel world, a lot of it by the big companies is price-driven: “This is our corporate policy… you must stay at this hotel”, and they negotiate the rates accordingly. But in unmanaged corporate travel or in leisure travel there are choices, so you have to understand that unless you develop that relationship and that loyalty and that you are there for them and can deliver and make them look good, someone else is going to do it. You’re not going to get the business. As you can’t be all things to all people, you have to find out who is the 20% that’s going to deliver the 80% of business. With the shifting face of travel, there’s been a huge shift from employees to independent contractors. Independent contractors have their own book of business. A majority of them have been working in the industry for less than three years, so they don’t come to the industry necessarily with an understanding about brands or the industry in general. And the other big trend is that they work from home, so how do you educate them? How do you reach them? You have to adjust your strategy. We have more and more members that are new to the industry, that are independent contractors and are working from home. How do we help them be successful? I’m just doing what I’ve done on a much larger scale now.

What would you say are the biggest takeaways from the Vegas conference for the members you spoke to?

I spent time doing workshops for members. There is so much going on in the industry externally that is impacting the hotel industry, from mergers and consolidations and acquisitions of course to loyalty programs to OTAs to direct bookings to Airbnb and Google and Trivago and Expedia and booking.com to general economic trends. Some hotels have recently announced commission cuts. Why? Why are fees in hotels rising? What do all these consolidations and mergers mean? Luxury leisure is a great channel for distributing a high-revenue producing customer, whether it’s in hotels, airlines or cruising. They stay more, they spend more and they are more inclined to be loyal, and the loyalty is based more on the experience and the personalisation than on discounts. So, for the hoteliers, the question I try to get across is “What should you try to do? Drive loyalty through discounts or through added value?”

Today, as you may or may not know, there is also a pivotal wave, away from hotel operators owning the asset to now collecting fees for management and franchises. This means owners are getting more involved again, and as any owner should, they are looking at profitability. But it should not just be about “cut, cut, cut”. Cruise lines do a great job when times are tough. They will invest more and create more awareness. But sometimes in the hotel space, when times are tough, it’s “cut”: dig your way out by cutting, instead of elevating. Some hoteliers, many years ago, when there was a great recession, cut prices. They are still trying to get their prices back to the levels from years ago, so the good hotel operators will not cut prices, because they know in the long run, RevPAR is a combination of occupancy and average rate, so if you don’t have the average rate, ultimately you cannot be profitable.

How do you choose the hotels you are going to add to the network? What do they have to give to be registered as a signature hotel?

We are very lucky to be supported by members who are on the hotel and resort committee. Signature has 10 committees: hotel, cruise, marketing, technology, luxury, and so on, and the hotel committee provides us valuable feedback and recommendations. We look at the markets individually and see if the market is growing or declining, based on GDS data, then we look at how are the current players in the market performing? Are they growing? Are they flat? Are they declining? How engaged are they? How responsive have they been to being in our network? Are they taking advantage of the tools and resources? Are they coming to conferences? Are they marketing? Are they engaging with our customers and so on? Where might there be opportunities for new partners? We don’t want to dilute the share from the current partners. We want to grow the pie rather than cut the slices smaller. We also look at new destinations, emerging trends & experiences. What feedback are our members giving us? So, there are a lot of factors; it is not a science per se, it is more of an art. At the same time, we remove partners at the same time as we’re renewing. I believe we have 97% annual retention. In some cases, hotels will elect not to renew with us. In some cases, we elect not to renew with them. In some cases, there may be a change in ownership or change in management or they are going to close – either for an extensive renovation or due to a natural disaster… so they are put on hold. Basically, we want to provide to our membership which is diverse, a balanced portfolio, so whenever they are speaking to a potential customer they feel they can put pull something out of the bag. We are positioned around luxury and premium. But not everyone wants to spend $1,000 a night. Maybe they do, but maybe on some occasions they want to spend less. So, we just want to give all members a robust portfolio and we want to be aware of changes happening today. For the customer, it’s “What kind of experiences can I get and how can you personalise them for me?” So, when we are looking for hotels, we are talking about their experiences, in the hotels as well as maybe through alliances or partnerships.

Here at ILTM Cannes the lead theme is wellness. Is that something you’re looking at in particular?

Absolutely. We just sat down with Six Senses, who have always been years and years ahead of the curve. Wellness and sustainability are part of their DNA, so we are thrilled to be growing our partnership with Six Senses and they have a lot in the pipeline. We are right now actively promoting Miraval Resort & Spa in Austin – a brand-new resort in Texas Hill Country. Like the Miraval Resort & Spa in Tucson, it’s the same philosophy of mindfulness, life in balance. These experiences can be life altering.

What have you seen here at ILTM Cannes that has stood out? Is there anything in particular?

There is such diversity here. You have to stay educated. What is not on our radar that should be on our radar? Because again 1,100 hotels may sound like a lot, but in reality, it’s a very small percentage of the world’s greatest hotels & resorts and unique places to experience.