We know that the travel outlook is going to have a huge impact on these sectors. We've got with us Gilda Perez Alvarado who is
the global CEO of hotels and hospitality for J. El Al Gilda. It's always good to check in with you. This is a milestone
moment. So we've talked through this pandemic about how the sector was doing. Is this a watershed. I mean is this sort of
the beginning of the end for the industry. Certainly when we kind of if we're talking about across North America across the
US this is the booster that we were looking for. And by the way I mean listen it's been a story of two halves right now in the
U.S. with markets that have been very heavily dependent on national or domestic tourism doing very well particularly weak
markets like Florida. But a market like New York City which is so heavily dependent on international. This is the booster that
we were waiting for. So you know I'm today attending the NYU would tell investment conference. I can tell you that enthusiasm
and welcoming of this news today is just great. So much enthusiasm is there. The supply side is a welcome it at the
moment although we're hearing and seeing and experiencing the lack of labor at the moment the shortages upon every sort of
restaurant industry customer facing industry right now there is a sign up saying help needed. All the hotels were able to
welcome these guests. You've hit the nail on the head. This is the biggest challenge the biggest headwind that we have as it
relates to hospitality. So it's this is not a demand issue. I would say demand is coming back at the strongest we've ever
seen. It's probably going to be a new renaissance if you will in terms of travel and tourism. It is the shortages of staff that
we have. And you know we're right now competing with gave workers right now. You know Amazon is announcing great pay per
hour wages flexibility. And so I do think it's time for a lot of these hotel companies to rethink how we're going to attract
labor back into the system. This is the biggest hurdle that we have. We can tell you at the Marriott marquee right now business
is flowing it's booming. It feels really good. But you do notice the shortage of labor for short.
And certainly we look at the stocks. I was just having a quick look at Hilton for instance over sort a three year period. It's
pre pandemic levels. So even though we're yet to get back to pre pandemic full capacity as you say there are labor shortages.
What are the changes we're seeing I want you to comment on. Is this changing of a metric from rev par revenue per available
room to total rev par. What do we mean by that. What's the shift. It always makes me nervous when you see a sector saying
we're going to redefine how we always describe success. What are we doing here. I think we're finally doing the right thing. This
should have happened actually pre pandemic. And so basically what we're suggesting with total revenue per available room is
we are looking at every single square footage of the hotel and seeing how it generates money. Right. Revenue is not just
generated by selling rooms. You know hotels are becoming a little bit more dynamic as it relates to other ancillary
revenues where whether it's food and beverage spas fitness you name it. Right. And so the point Jesus this who tells her
reinventing themselves to be able to provide a greater experience. They're offering more services above and beyond the
room or maybe more services to not just those let's say hotel staying customers but maybe people who are going to go there by
the day. And so that's why we're suggesting and what we're hearing from the investment community that we've got to look at
total revenue being generated in the hotel. The other thing to note too is that there's been this hotel association of real
estate as well. Right. So we're going to see a little bit more of the blurring of the lines in terms of using hotel metrics and
other forms of real estate and now us using you know measuring what the hotel itself can generate again above and beyond just
the the room nights stay and go to how you're looking at investing. Therefore to show you are making the highest margin
the most efficient use of capital at this moment. I mean is it all about technology. First and foremost if you are short of
labor and wanting us perhaps a slightly slicker experience when checking in that still we're all reeling from Covid and trying
to perhaps limit all interactions to a certain extent for sure. That's the biggest question right now in terms how to
use technology to enhance the guest experience and to be a little bit more effective. Now we must be mindful that in
certain unionized environments maybe the adaptation of of technology as a solution may not be as fast as in some other
markets. But definitely our investors are looking at use this technology how to be more efficient how to do more with less how
to redefine that customer experience. And you know technology. Absolutely. It is important maybe not
so much to replace labor because at the end of the day we're a human industry.
Right. You're coming here for the personal. Human interaction there really is a way to enhance the experience. We become very
used to communicating biotechnology. You know our our lives pretty much a hybrid between virtual world and real world. And
so it is expected from a guest perspective that your home away from home which is the hotel perfectly equipped with the
technology that you need to do your you know your day to day thing. The other asked this is for you. Go ahead.
Well I just I think this is a really important point in terms of the planning that you're hearing from the industry. Because to
Caroline's point we when you see a labor shortage we know it can speed up investment in labor replacing technologies. This sector
had already been working on that. Right. There was already a check in process that didn't involve human beings. And I'm
curious though because we're talking later about the degree to which frontline service employees disproportionately hurt are
the most vulnerable. Some of those jobs may disappear permanently because of this labor gap that we're seeing and
shifts that happen on. On the other end of it employees may go away. Are you hearing that planning. Maybe a little bit. I think
job security is something that we must address as you know hotel companies.
But you know we've got an enhanced job security maybe look a little bit on benefits and then let's not kid ourselves or maybe
a little bit of wage inflation going on. And again this is not just in hospitality. This applies to other industries as well.
But we do have to look at the labor side of the equation. This is as I said the the biggest headwind that we have. The good
thing is that you know with two point nine trillion dollars of savings some ass and people ready to get on planes and travel
and spend time in hotels they think those increased costs will be more than offset by increase in revenues. Just from this
amazing wave of demand that we're seeing and that we will expect to continue to see going forward. What are the opportunities for
you right now. Gale the way you're seeing the need for your services and what we're seeing the biggest deep pockets of value
are in markets like New York City. Right. This mark in New York has just gotten beat up you know in every single sense of the
world were during the last 20 or so months. And so you know there's an opportunity right now for investors to look at
hospitality real estate in this market to maybe redefine that guest experience. As you were talking before in terms of
technology and Catholics being invested in these properties. And now that international travel was back we will finally see a
recovery here. There are other markets that are just you know they've been performing very well during the pandemic. They're
just perform even better. Take Miami asset as an example which is a booming town. The international demand that will be coming
there that's just an enhancement. But I would say in terms of value for your for your dollar right now I would be looking at
companies that have an exposure to maybe corporate cities very heavily reliant on international travel. You know those are
obviously dragging behind you know prices still are still very attractive. And these are cities that are not going anywhere. So
the lights are being turned back on and a dimmer but they're being turned back on. And so I would see I would say those are
the greatest pockets of value at the moment.