July 29, 2019
Introductions Colby Hutchinson Jennifer Swan Melissa Doolin-Koehne Best Western Hotels & Resorts First Watch Restaurants TDn2K @swanstyle1 @loverofguac JSwan@firstwatch.com Colby.Hutchinson@bestwestern.com melissa.doolin-koehne@tdn2k.com
H U M A N F I N A N C I A L G U E S T C A P I T A L C A P I T A L F E E D B A C K P E R F O R M A N C E P E R F O R M A N C E P E R F O R M A N C E 2.6 million employees 31,000+ units 61,000 units 193 Brands $72 Billion Sales 200 brands Founded 1995 Founded 2009 Founded 2013 272 Brands 230 Companies 43,000 Restaurants Powered by: Powered by: Powered by:
90 Minutes of Fun Workforce State of the Trends in Industry Training Trends
What do you think? Respond at: PollEv.com/chart19
What do you feel your company is winning in? Poll Everywhere
CFOs Forecasting a Recession 38% 67% 84% PREDICT PREDICT PREDICT Recession Recession Recession Q1 2020 Q3 2020 Q1 2021 Source: CFO Global Outlook- Duke University
Average guest check grew more than visits % with positive comp sales % with positive comp traffic 64% 56% 54% 53% 50% 48% 30% 27% 22% 21% 15% 5% Total Quick Fast Casual Family Casual Upscale Industry Service Dining Dining Casual Source: TDn2K Source: Black Box Intelligence
The Game is Changing Industry Average Performance 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 Comp Sales 0.6% 1.1% 1.4% 0.9% 0.2% Comp Traffic -1.8% -1.4% -1.6% -2.0% -2.9% Comp PPA/PTA Growth 2.5% 2.6% 3.0% 2.9% 3.1% Comp Food Sales 0.8% 1.5% 1.6% 0.8% -0.2% Comp Beverage Sales -0.8% -1.0% -1.0% -2.9% -3.2% Comp Dine-In Sales -1.3% -1.3% -1.9% -2.5% -3.3% Comp To-Go Sales 7.5% 8.0% 9.2% 10.1% 9.5% Source: TDn2K Black Box Intelligence
How to Prepare for 3 rd Party Delivery Be ready for high volumes of delivery orders Customize your delivery offerings Make necessary staffing changes
- Ended in September 2018 - Down in June ‘19 - Driven by Avg. Daily Rate Source: Smith Travel Research
Flattening occupancy predicted in 2020 Occupancy ADR RevPAR Chain Scale % change % change % change Luxury -0.2% 2.4% 2.2% Upper Upscale -0.3% 2.2% 1.9% Upscale -0.3% 1.8% 1.5% Upper Midscale -0.2% 1.8% 1.6% Midscale -0.2% 1.7% 1.4% Economy -0.3% 2.1% 1.8% Total U.S. -0.2% 2.2% 1.9% Source: STR Chain Scale forecasts, June 2019
How to Prepare for Declines in Traffic & Occupancy Basic Revenue management training for managers is essential Training to Maximize ADR & Average Guest Check Make necessary staffing changes
Domination by parent companies
JD Power guest satisfaction rankings | Economy Microtel (Wyndham) 797 Travelodge (Wyndham) America's Best Value InTown Suites Days Inn (Wyndham) Super 8 (Wyndham) Red Roof Inn Economy Average 756 Extended Stay America Econo Lodge Motel 6 Rodeway Inn Howard Johnson (Wyndham) Knights Inn 668 650 700 750 800 850 900 Source: JD Power, July 2019
JD Power guest satisfaction rankings | Midscale Wingate (Wyndham) 846 Candlewood Suites (IHG) * LaQuinta (Wyndham) * ^ Sleep Inn (Choice Hotels) Best Western (BWH) AmericInn (Wyndham) Hawthorn Suites (Wyndham) Midscale Average 810 Baymont (Wyndham) Quality Inn (Choice Hotels) Ramada (Wyndham) 782 650 700 750 800 850 900 Source: JD Power, July 2019
JD Power guest satisfaction rankings | Upper Midscale Drury 876 Hampton Inn (Hilton) Home2 Suites (Hilton) * Fairfield Inn (Marriott) TownePlace Suites (Marriott) Holiday Inn Express (IHG) Upper Midscale Average 835 Best Western Plus (BWH) Country Inn & Suites (Carlson) Wyndham Garden (Wyndham) Comfort Suites (Choice Hotels) Holiday Inn (IHG) Comfort Inn (Choice Hotels) Clarion (Choice Hotels) 797 650 700 750 800 850 900 Source: JD Power, July 2019
JD Power guest satisfaction rankings | Upscale 862 Best Western Premier (BWH) * Cambria Hotels (Choice Hotels) * AC Hotels (Marriott) * Hilton Garden Inn (Hilton) Hyatt House (Hyatt) Springhill Suites (Marriott) Hyatt Place (Marriott) aloft Hotels (Marriott) Courtyard (Marriott) Staybridge (IHG) Homewood Suites (Hilton) 840 Upscale Average Residence Inn (Marriott) Wyndham (Wyndham) Doubletree (Hilton) Crowne Plaza (IHG) Radisson (Jing Jang) * Four Points (Marriott) 650 700 750 800 850 900 Source: JD Power, July 2019
JD Power guest satisfaction rankings | Upper Upscale 866 Hard Rock Hotel * Gaylord (Marriott) * Marriott (Marriott) Kimpton (IHG) Renaissance Hotels (Marriott) Hilton (Hilton) Hyatt Regency (Hyatt) Upper Upscale Average 847 Embassy Suites (Hilton) Autograph Collection (Marriott) * Omni Hotels Westin Hotels (Marriott) Delta Hotels (Marriott) Hotel Indigo (IHG) Sheraton (Marriott) 829 650 700 750 800 850 900 Source: JD Power, July 2019
JD Power guest satisfaction rankings | Luxury Ritz-Carlton (Marriott) 881 Lowes Hotels Park Hyatt (Hyatt) * Four Seasons Fairmont (Accor) Luxury Average 861 JW Marriott (Marriott) Grand Hyatt (Hyatt) St. Regis (Marriott) * Waldorf Astoria (Hilton) W Hotels (Marriott) Intercontinental (IHG) Trump Hotels * Sofitel * Andaz (Hyatt) * Conrad (Hilton) * 841 650 700 750 800 850 900 Source: JD Power, July 2019
New Brands Emerge
Robust pipelines indicate future growth Active Properties Rooms Room Count In Pipeline In Pipeline Marriott International 2,790 471,000 1,269,288 Hilton Worldwide 2420 371,000 886,994 InterContinental Hotels Group 1,828 267,000 784,678 Wyndham Worldwide 1,400 176,000 705,043 Jin Jiang International 3,161 345,000 680,000 Accor 1,031 184,000 648,998 Choice Hotels 1,050 85,500 564,828 Huazhu (formerly China Lodging Group) 924 90,000 379,675 Source 10k from SEC Financial Reporting
Workforce Trends
Biggest Challenges & Opportunities in 2019
Staffing pressure is real 3.6% national unemployment rate (May 2019) 38 states have unemployment rates of 4.0% or lower Source: Bureau of Labor Statistics
Open Positions: 900,000 per month Bureau of Labor Statistics
Restaurants report they are understaffed 69% 93% hourly FOH hourly BOH Source: TDn2K
Severe management understaffing reported in restaurants 52% 19% Managers General (non-GM) Managers Source: TDn2K
Turnover in lodging has reached critical levels Up to Increase in GM Turnover GM Turnover * Estimated for new from 2016 hotels Current Open postions * Source: Bill Crawford, American Hotel & Lodging Assoc. Travel Weekly Jan, 2019
Turnover Remains Extremely High Restaurants Lodging 105% 94% 53% 52% 40% 28% Front of House Back of House Unit Level Manager
Voluntary Terminations Increasing Percentage Of All Terminations That Were Voluntary 2017 2018 77% 75% 69% 67% 67% 63% FOH Hourly BOH Hourly Manager* Source: TDn2K People Report
Hourly Staff Are Leaving Quicker Hourly Back-Of-House Hourly Front-Of-House 2017 2018 2017 2018 60% 60% 53% 50% 43% 42% 40% 40% 29% 25% 19% 17% 20% 20% 0% 0% Less than 30 days Less than 90 days Less than 30 days Less than 90 days Source: TDn2K People Report
Cost Of Turnover Per Employee $13,996 $1,816 $10,361 Per General Per hourly Per restaurant Manager employee manager (excluding GM) Source: TDn2K People Report
How are unemployment and turnover impacting your training? 5 min - Table Activity
Why are your employees leaving and what can you do about it?
Why are employees leaving? Management Hourly employees Job abandonment Higher compensation Immediate promotion Personal Reasons at another company Higher Paying Job Poor Work/Life Balance Source: TDn2K People Report
Old ‘Seasoned’ is the New Orange
Work-Life Balance is important 11% of General Manager’s strongly agree that their job allows them to spend enough quality time with family and friends Source: GM Connect – powered by Gallup and TDn2K Source: GM Connect – powered by Gallup and TDn2K
Restaurants Offering More Money To Attract Talent Source: TDn2K
The Best Have Better Servers & GM’s (Sales & traffic) 28.6% Genereal Manager 48% Net Sentiment for Server Knowledge 23.5% Turnover 17% -5.1% +31% Best Rest Best Rest Source: TDn2K People Report
What is Working to Increase Retention Most Effective Retention Measure 2nd Most Effective 3rd Most Effective Non- Improved Improve growth Flexible managers selection/recruit. & development scheduling Managers Improve growth Improved Increase Pay (excluding GM) & development training Increase General Improved Improved employee Managers training selection/recruit. recognition Source: TDn2K
Why did you pick what you did? 5 min - Table Activity
Trends in Training 2019 Results
Investments in Training & Development Increasing (Investment as % of sales) 1.75% 1.50% 1.10% 2014 2016 2018
One-Third of Companies Increased Training Headcounts Restaurants Lodging
Use of External Resources is Increasing (percentage of companies) 75% 67% 2017 2019
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