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The new year forecast on the state of hospitality
As meeting professionals launch into 2024, Smart Meetings sought out the wisdom of Associated Luxury Hotels International (ALHI) CEO, Michael Dominguez, for his outlook of things to come in the new year.
Moving Past Normal
With the Las Vegas CES setting record numbers for attendance in January, we asked Dominguez what this means for the meeting industry.
“We’ve learned that we’re not back to normal; we’re well past it,” says Dominguez, “Everyone’s hitting record attendance, and I think that’s a variety of things. The growth of small to medium businesses alone are telling me there’s a lot of growth that’s happening.”
Despite the issues of the pandemic, Dominquez believes the meetings industry has calibrated to move beyond it.
The Artificial Intelligence in the Room
AI has become a major hot topic in our industry, whether it is ChatGPT or computer-generated content.
“To me, ChatGPT is to AI what Bitcoin is to blockchain. ChatGPT is a product based on a technology we’ve been utilizing in our lives every day. Anybody who has ever talked to Siri or talked to Alexa, you are literally dealing with AI. What we’ve done now is put that on steroids,” says Dominguez.
Despite the fever pitch excitement about the advancement of the technology, Dominguez suggests being mindful and using the AI with calculated intention. “Make sure it works for you. Make sure you have a purpose. What is your objective and where do you think technology can help you? That’s where I think AI really has a purpose.”
Dominguez pointed towards Microsoft Co-Pilot as an AI that could potentially save planners a lot of time in their day, “That is where I think AI now starts to make us better. It makes us more efficient, and at the end of the day it makes us a little bit smarter, and I think that’s better for everybody.”
Inflation Is Going Down
According to Dominguez, inflation is dropping around the world.
“We’re headed in the right direction. The problem is, it’s still well elevated to long-term running averages. Which means there’s still going to be a little bit of that friction in there. You’re gonna feel a little bit of that inflation,” says Dominquez.
Based on the data he has seen, Dominguez states he does not see a recession in our future. So much so, that AI may be beneficial in the long run to the industry and the job market.
“We have the reverse opportunity right now. We have more jobs than people,” says Dominguez, “we’re becoming static, and we have declining populations in the advanced economies around the world, which means we’re not going to have enough people for all the jobs we have, so we need to find some use for technology to kind of fit that in.”
Major Cities Keeping Rates Consistent
For planners looking to host their next event in a major city but were hoping for rates to drop—you may have to keep waiting.
“I don’t think major cities are going to reduce rates,” says Dominguez, “The reason I can confidently say that [is because] we hit record revenue in 2023 and we’ve declined in profit year over year.”
The cost of maintaining buildings and managing labor also still poses a major issue.
Dominguez continues, “Over the last three years we’ve actually increased wages in our industry by close to 28%, and that’s why rates can’t come backwards.”
Fortunately, the rate of growth in major cities has slowed and is positioning itself into a more normal trajectory that the industry has not seen since before the pandemic.
Read More: The World is Open for Business
Good Eggs, Dry Olives
For planners looking at the cost of F&B, Dominguez has good news for you: it is getting better.
“Food cost is coming down …. [The cost of] eggs are now normalized because we don’t have a bird flu. But olive oil has had a 900% increase in the last 12 months. That has to do with a very dry Europe, a very dry summer, a very bad crop season.”
The industry is also improving on food waste. “I do think most of our industry is doing a really good job of focusing on how we serve,” says Dominquez, “You’re seeing small plates that are already pre-prepared. That’s all intentional because that cuts down waste. What we have found is that the smaller the plate we give you to begin with, the less waste we’re going to have.”