Hospitality 2017: A Q&A with Gray Shealy

Gray Shealy is the Director of Hospitality Management at Georgetown University. Formerly an executive at Starwood Hotels, Shealy brings his wealth of experience to the classroom as he guides the hoteliers of tomorrow in their future careers. He sat down to talk to us about his transition into academia and his predictions for hospitality in 2017.

Q: You worked for Starwood, which is considered one of the most innovative hotel brands on the planet. In terms of innovation, what would you say is the most surprising thing to happen in the hospitality industry in the past five years?

I think there are two pieces to this. One is the pace of change that we’ve seen in the industry, and the second is the outsiders who are coming in to hospitality. As far as the pace of change goes, I’m talking about the speed at which new things have occurred and new businesses arisen.

As for the outsiders, these are the people who have come in and changed the business model of hospitality. The obvious ones are Uber and Airbnb. I think these two companies are really the game-changers because they’ve changed not only lodging, but also the way we get around. I think they, and others like them, will continue to rock the boat and we must address them.

Q: You studied hotel design and architecture in university. Why is design such an important part of hotels? What trends do you think we’ll be seeing in hotel design over the coming year, particularly as brands try to cater to Millennials and recover some market share from Airbnb?

For me, the experience of the space was an important thing to think about — especially in hospitality, because hospitality is one of those few components of architecture that’s residential. You’re actually going to be living in the space. It’s a home away from home, so the customer experience in that space must be extremely well thought out. It must welcome them, it must make them feel comfortable, it must support all the things they need when they don’t have their home to go back to.

The envelope of the hospitality space is extremely important because of all these considerations — I think more so than in museum and office architecture, where people are in and out in a limited period of time. In hospitality, you have multiple functions, so all the surfaces that you touch have to be comfortable. On top of that, you have to build an experience that reflects a brand and its differentiation.

We all talk about customization and authenticity quite a bit. One thing we’re constantly trying to figure out is the difference between cookie-cutter design, which you would typically find in many big chain hotels, and design that can satisfy the consumer quest for authenticity and living like a local. Hotel design now has to be a lot more specific to locations.

Q: I’ve been reading about how certain brands are creating more communal spaces for Millennials. How can hotels balance the needs of Millennials with those of Baby Boomers, who may not care for those things?

There’s so much attention on Millennials these days. We’re obsessed with doing Millennial-only hotels, but a lot of the research is showing that as soon as Millennials hit their 30’s, they act in ways that previous generations have. I think just designing for Millennials is not the solution that we need to be thinking about. Really, all these different guests — Boomers, Gen X, Millennials, and the digital natives who are coming after them (Gen Z) — exist in the spaces simultaneously. The space has to be comfortable for all guests, so we have to think about how all of these different people will be using the hotel.

Q: There have been a lot more chains coming out with brands geared toward Millennials. Do you see that becoming more of a trend?

Potentially. There are a lot of hotel companies out there, and each is creating a portfolio of brands that caters to different segments of guests. Each of these different portfolios needs to have a brand that appeals to a younger clientele — something that’s a little more affordable, a little more hip, a little more communal, maybe more urban in its footprint. With a lot of these companies, you’re going to see this trend because they want to have a selection of the right brands for different types of audiences. Otherwise, they’re not seen as having a diverse enough portfolio to attract the loyalty that these big companies need to have to keep people within their ecosystem of brands.

Q: Airbnb has seen a great deal of growth recently. It has branched into business travel and now it’s trying to get its City Hosts program off the ground. Do you think Airbnb will pose a significant threat to hotels in the coming year? Why or why not?

This is the question everybody asks themselves and there are a million different studies being done. Depending on the location, Airbnb does have a lot of impact. So, for example, with the latest legislation in New York City, you’re having whole apartment buildings functioning as hotels, and one questions whether that is actually a correct thing to do. Clearly, New York lawmakers are saying it’s not allowed, especially since hotels have to abide by certain rules.

Now, when you’re talking about individual home-sharing that happens on a much smaller scale, you do have to think about two things. One is the trip type for your audience, and the other is the destination itself. For example, if you’re on a holiday and it’s a personal expense, Airbnb might be a more attractive option. Oftentimes, it’s a little more casual, you’re not necessarily going to need a lot of services or amenities while on vacation, you might want something that’s a little less expensive, something where you can enjoy the destination a little more, hence being in a local neighbourhood.

If you’re on a business trip, I would say it’s a different kind of ball game, because you’re going to need different types of amenities, more business facilitation, you’ll need to be more central, you won’t be spending much leisure time in the location, you won’t care about price as much because your company is probably paying for it. So Airbnb is really making an impact on the leisure side more than anything.

Q: Technology is become more of a fixture in hotels these days. What can we expect to see with this trend going into 2017?

There’s always a heavy discussion in hospitality about technology. One, because hospitality is such a human and labor-focused industry, but also because implementing technology takes a lot of capital — capital that hotels don’t always have available to implement the latest and greatest every year.

There’s a real question that we need to be thinking about in the hospitality industry, which is the struggle between what needs to stay human and what needs to be tech-focused. I think it is something that’s going to affect the future of our industry, whether we employ robots on a large scale. When I say robots, I don’t mean an R2-D2 or a human-looking thing, but robots that facilitate functions that were once executed by humans, like removing room service trays or things you may not necessarily need a human to interact with.

I recently did some research into trend forecasting, and I think virtual reality is going to be a big thing in the hospitality industry. Since people aren’t traveling to certain parts of the world right now because of the economy, the wars, and so forth, VR is a great way to experience a space. It’s also a great selling tool because you can see what you’re getting before you invest thousands of dollars into an elaborate vacation.

Q: The hospitality landscape is constantly changing, and, as we’ve covered, today’s guest doesn’t necessarily want the same things as the guest of yesterday. What challenges will hoteliers face in engaging their guests and attracting new ones in the coming year?

The proliferation of brands. There are so many brands out there. There’s a new brand every month, it seems like. I consider myself a brand expert and I have a hard time keeping up with all the different brands, so I can only imagine what it’s like for the consumer. I think it’s a big challenge for hoteliers to keep their brands relevant and alive with so many competitors out there.

With regards to today’s guest not wanting the same thing as the guest of yesterday, I’m not sure if that’s necessarily 100 percent accurate. I think there are a number of guests out there who yearn for the yesteryear. You can almost ascertain that in some of the design trends coming through. In the past 10 years, a lot of different ideas from previous decades have been recycled. There seems to be a resurgence of hippie-dom from the ‘60s and ‘70s, and some of the pink from the ‘80s, as we struggle to find our identity when technology gets most of the focus. When you get down to tangible elements like fashion and design and interiors, I think people do run back through previous generations, looking for the elements they want to keep. So because most restaurants focus on getting rid of the white tablecloth and the formal experiences of yesteryear, I think it’s sometimes refreshing to come across that nowadays.

Q: It’s frustrating to be told what we want because of the demographic bracket we’re in, but everyone’s different, right?

Most of my students are Millennials, and they hate being categorized into this bucket. And honestly, I agree with them. We talk about customization and being individual, but at the same time, we’re contradicting ourselves and saying, “Well, everybody is exactly like this. All Millennials want is technology and they don’t want anything traditional”, but it depends on the person. People are not robots. They all have personalities, they all come from different backgrounds, they all come from different points of view. I don’t think the world has changed that much.

Q: You recently made the transition from the corporate world to academia. What did you learn during this process? Do you have any new perspectives on hoteliering that you’d like to share?

I have an architecture background, so I didn’t have a background in the hospitality side of education. This was a surprise move even for me. It was never necessarily engineered to be part of my strategic career plan. I just happened to be in the right place at the right time, and it seemed to be an incredible opportunity — and honestly, it has been. I love working with people who are ready to take the next step in their career and looking for guidance and help. For me, that is very fulfilling.

One of the things I’ve seen our industry struggle with over the years is that education hasn’t been highly valued. This industry has been very slow to evolve. The idea of starting as a bellboy and working up the ladder to be company president — hospitality is one of those few industries where that has been a standing model for people to follow. Years of experience have previously been valued more than any kind of education. But I think, with all the changes I talked about earlier, the industry has been shaken up so much that hoteliers realize they do need a better-educated workforce to be able to handle all of these external forces that are changing things.

The challenge we’ve had to look at from the university side is what skill sets students actually need from a university versus what they can get from experience. Obviously, we don’t teach people how to check in somebody at a front desk or how to carry a tray in a banquet hall. These are things they can learn on the job. What types of skills, like strategic leadership or thinking creatively, could a university provide to help them apply it back to the hospitality industry? Hospitality education needs to evolve to become relevant to the industry, so the industry can then encourage their employees to go back to school and guide them for the future.

Q: What are your top three pieces of advice for hoteliers going into 2017?

One, the notion of humanity and the connection with the guest is more important than ever, especially when we talk about technology replacing humanity. We need to think very critically about which interactions between employees and guests are the most meaningful in the customer journey. We often get lost in technology, and we forget that travel is all about making new connections and meeting people.

Another one is differentiation. It is the key to offering an authentic experience so that customers can make a strategic choice to patronize your property. This drives loyalty and revenue down the road, and it increases the ROI of the business. Hoteliers have to think about what is truly unique in the property. Are you really different from the brand down the road that targets the same audience? What is it about you that is extremely special? It doesn’t need to be anything elaborate or over the top, but we do need to be thinking about what those key differentiators are.

The third thing is that there’s going to be a return to the hotel functioning as a safe space. If you were traveling to Egypt in the 1950s — which back then might have seemed like an odd, extraordinary experience — going to a Hilton brand, a brand that you knew, guaranteed that there would be some kind of international standard that would make you feel comfortable there. I think that, with all the different issues that are happening around the world — wars, animosity, people not feeling comfortable about traveling — hotels will need to re-assume that role of providing a safe harbor, a sense of security, and a sense of protection while also providing the connection to the local fabric.

What do you think about Gray’s predictions? Let us know in the comments, or on LinkedIn, Facebook, or Twitter!

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