Hospitality executive says industry is growing again
The hospitality industry is growing again. More people are traveling to the U.S., thanks to new visa waiver regulations while the Millennials are expected to be a long-term force in increased travel abroad.
Those are among the top travel trends in 2014, according to Jim Abrahamson, the CEO of a large global hotel management company.
Abrahamson leads Interstate Hotels & Resorts Inc. in Arlington. The company holds an ownership interest in 31 hotels, including 10 in Virginia, and helps manage 390 hotels with more than 73,000 rooms for major brands such as Hilton and Marriott in North America, Europe and the Asia-Pacific region.
Interstate recently opened seven hotels in New York, Florida and Russia, including three properties that opened just weeks before the Winter Olympics near Sochi, Russia.
While the majority of its business lies outside Virginia, the company likes its metropolitan Washington location, an area Abrahamson refers to as “the Silicon Valley for the hospitality industry. “ With Marriott’s headquarters in Bethesda, and Hilton Worldwide’s move from California to McLean in 2009, there’s a strong cluster of leadership and talent in the region. “It’s a dynamic business environment,” he says.
Plus, Washington, D.C. is a gateway city for international travelers. Inbound international travel has grown during the past year with the U.S. government implementing more relaxed regulations for visa waivers and visa wait times. “We’ve done a great job of improving the visa wait times for the big markets like China, India and Brazil,” says Abrahamson. Now the challenge, after getting people here, is to improve infrastructure and roads around airports, so visitors can begin domestic travel quickly, he adds.
On the outbound side, Abrahamson predicts that Millennials (people born from the 1980s to the early 2000s) will be a long-term force as they consider travel a “birthright. Kids today go everywhere,” he says. “The high school trip? They go to Rome. They’ve grown up traveling … The rise of Generations X and Y is one of the most dynamic forces in travel and technology, in how people travel.”
Abrahamson says the hospitality industry is sometimes criticized for entry-level jobs. “If you enter our industry and work, you can move up the ladder quickly. We’re a ticket to the middle class. We’re the kind of industry that promotes from within.”
Interstate Hotels employs 162 people at its Arlington headquarters and a total of 607 in Virginia (including the headquarters workers).
Abrahamson got his start at the bottom, working as a dishwasher and a desk clerk for The Registry Hotel in Bloomington, Minn. The brand no longer exists, he says. Because of the industry’s flexible hours, he continued working in college and was promoted to the position of general manager.
Abrahamson has been CEO at Interstate since 2011. Before that, he held senior leadership positions with InterContinental Hotels Group, Hyatt Corp, Marcus Corp. and Hilton Worldwide.
Asked if the hospitality sector has bounced back from the recession, Abrahamson observed that the hotel industry is resilient. While the industry still has a ways to go before full recovery, he says there’s a lot of capital in the market now coming from REITS (real estate investment trusts), institutional investors like pension funds and individuals. “Financing is available, but not at the same levels as the go-go years in 2005 and 2007.”
Interstate Hotels & Resorts is a wholly-owned subsidiary of a 50/50 joint venture between subsidiaries of the Thayer Lodging Group in Annapolis, Md., and Jin Jiang Hotels, a hotel management company based in Shanghai China.