Fact: Hospitality is a ‘people’ business. Alternative fact: It’s actually become a real estate business.

Stephen W. Ayers, CEO STAY Ahead Hospitality

The hard fact for me is that I got into the hospitality profession because it is a people business, and the main reason was the ‘staff’ people. In those days the hotels were little communities that cared almost as if the property was their own. They cared about each other like family and covered for each other.

For others the hospitality business as ‘a people business’ is an alternative fact. I would venture to say that the majority of owners are in the business for the real estate and recognize that the people are important only in keeping their investment safe and allow for a return while the value increases sufficiently to sell.

Hotels have been bought and sold and changed hands over many generations, but not as frequently as today. The major brands sold off most of the company owned properties back after the turn of the century when they realized that the profitability lay in managing and not owning.

Of course the unions are there to protect employees, and laws are in place that limits the possibilities of advantage being taken of staff. But payroll is ever on the increase and staff reductions are trending, with the burden of extra work falling on those who stay. In Canada, strict health and safety laws have gone a long way in curtailing work accidents and ‘keeping’ the operators honest.

There is, however, a seismic change appearing over the horizon, and it is coming faster than we think. The largest consumer group in the world today is the Millennial generation, and the same is true for the staff contingent in hotels.

Why a seismic change you ask?

The answer lies in the fact that the Millennials hold radically different values, needs and expectations than any of the generations before them. Owners and operators who do not recognize this and adapt to the new realities do so at their peril. Value of real estate increases with the success of the hotel, and those that adapt in some way or all the way will benefit.

Millennials actually care about a whole raft of things, from the environment, to community involvement, unique experiences and they live to spend. They are looking for true ‘hotelier’ value in their purchase of a stay. They want to see that the hotel cares for their values and is not just another generic hotel where if you close the blinds in your room you could be in a Marriott, Hilton, Sheraton, Holiday Inn, Hyatt, the list is never ending in its’ boredom.

They seek out places to stay that conserve energy, that are community involved, that off unique and different experiences, and that fulfill their needs. The hotels that care and engage their staff wholeheartedly and treat them fairly and with respect to their diversity will increase the value of the real estate for independent hotels, and ‘hotelier’ owners who are in the business foremost because they love it will reap the benefits of ‘true’ ownership.

Sure, the generic hotels will always be there for the developers of real estate, and will always be frequented by the travelling businessmen looking for a value place to stay, but when on vacations, families of Millennials will always be looking for that ‘pearl’ of a hotel to stay at and spend money in.

Which type of hotel would you rather work in?