The Golden Age of Travel May Just Be Around the Corner: Hospitality Insights from Art Adler of Adler Advisors, LLC

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Art Adler is no stranger to working hard, building genuine relationships, and creating a long legacy of success as a trusted voice and leader in hospitality transactions and consulting.  From humble beginnings to becoming the CEO and Chairman of Jones Lang Lasalle (JLL)’s Hotels & Hospitality Group for the Americas, Mr. Adler’s stories and industry musings are just as colorful as they are insightful in learning how to grow a business, reflecting on lessons learned in leadership, and motivating people.  And while the Hospitality industry faces continuing challenges unseen in recent history, Mr. Adler’s perspective on that history, as well as the future directions and understanding of human behavior is a breath of fresh air after this industry has held its own breath for so long.

Starting young as a dishwasher at a local Howard Johnson, Mr. Adler eventually worked his way up in hotel operations, and attended Cornell’s School of Hotel Administration. From there, he spent the next 18 years in prestigious hotel consulting positions. He subsequently transitioned into the transactions side of the business, spending the next two decades leading JLL’s Capital Markets division as the CEO and Chairman of their Hotels & Hospitality group.  In 2020, Mr. Adler decided to move to his next exciting phase of life, starting Adler Hotel Advisors, LLC where his relationships and tenure provides opportunities for community engagement and sharing insights.

People have always been the core of the hospitality industry, as well as Mr. Adler’s focus in growing and sustaining a company.  In Mr. Adler’s tenure at JLL, he expanded the company from two offices and ten people, to fifteen offices around the Americas and 120 people. He also grew the business from transactions to include asset management, consulting, valuation, public-private partnerships and real estate tax appeals with some of the largest hotel owners and operators in the world.  This consisted of enhancing the JLL HOTELS business model and brand in to a fully integrated global business, and being the best at one thing: Transaction-oriented service to owners.  One of Mr. Adler’s keys to strong, sustainable growth was by creating a team of trusted advisors who built long-term relationships, enthusiastically noting “it’s not just about the deal – it’s about creating a culture of always doing right by your clients.  The business is a marathon, not a sprint.”  Mr. Adler is a firm believer in showing up more often and in a more meaningful way than the competition, investing in both employees and clients, consistently gathering feedback, and that fostering an atmosphere of transparency and meaningful relationships creates a long-standing and sustainable business.

Mr. Adler emphasizes that the core of a hotel’s business is purely based on physical and emotional experiences that cannot be replicated online.  Prior to the COVID-19 pandemic, hotels were seeing their largest upward trend in history, with demand outgrowing supply and year-over-year revenue increases since 2009.  While the Great Financial Crisis of 2008 was certainly devastating with RevPAR dropping by 17 to18%, this was caused by the spending cutbacks of companies and reduction in leisure travel caused by the recession.  With the pandemic, occupancy rates initially went down by an astounding 90% because the very nature of hotels and travel requires leaving home and the lockdown prevented travel.  The issue today is not because of a waning ability or interest in travel—in fact, it’s quite the opposite. Individuals and companies want to resume travel and will do so once they feel safe, which is promising for the industry.

Mr. Adler is reminded of similar effects of the September 11th attacks, hitting the industry hard as people were fearful to travel.  It took three to four months for people to feel comfortable traveling after the TSA implemented more stringent safety protocol at airports .  While the effects of COVID-19 are much more devastating due to the length and nature of the crisis, we can look back to the post-9/11 recovery period with a new normal from updated safety measures as we forecast a recovery and significant pent-up demand.  As such, Mr. Adler is optimistic in this recovery process; while urban and large group hotels will take the longest to recover, resorts and leisure-oriented hotels and those oriented towards individual business travelers are already faring better and are expected to recover first.  He expects the next 25 years to be the “Golden Age for Travel,” as demand explodes once vaccines and treatment make travel safer.  Additionally, the US population growth, expansion of the middle and upper-middle class, aging Baby Boomers with more disposable income and discretionary time, and Millennials valuing experience over material goods will contribute to this demand.  The industry may be in the middle of its worst moments to date, but its best days are still to come.

The questions now surround how the industry will evolve, by closely following investments and making observations on who is spending.  What will be the importance of brands as brand consolidation continues?  Will they become marginalized?  What do consumers truly value between brand loyalty, experiences, or location?  Will distribution systems like Google, Amazon, or OTA’s outflank brands?  If these major tech companies know everything about you, why wouldn’t they also tailor and intermediate your travel experiences?  Are bigger management companies better?

Unlike retail or office real estate where that space is being rented to others to run a business, a hotel is an operating business.  The way in which rooms are booked can be dis-intermediated, while the experience cannot. While the core structure of business operations will certainly change, the focus on hospitality experiences will evolve with the times and advance with technology and demand.  Mr. Adler’s insights come as both a relief and cautionary tale of what could pose as a challenge in the future as the industry emerges out of the pandemic.  And with his expertise with people and insights on the critical influence of human behavior in the industry, it seems that his faith is in the people who will come back with enthusiasm, ending the blight of the hospitality industry’s worst days and propelling it into a new era.

Cornell Real Estate Blog | Cornell University Baker Program in Real Estate

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