SAN DIEGO, California—Bill DeForrest thinks it’s a great time be an hotelier.
The president and CEO of Northbrook, Illinois-based Lane Hospitality hadn’t wandered into a time warp when he shared this sentiment during a break at the Americas Lodging Investment Summit in January. The 30-year veteran of the U.S. hotel industry thinks that now is the time for great hoteliers to shine.
re’s been a lot of transaction-driven activity over the last few years. There’s been a lot of finance-driven activity the last few years,” he said. “I think in 2009, it’s really going to be the year that the operating guys and true hoteliers at heart are really going to shine. They’re going to know how to run great hotels, and that’s what you’ve got to do this year.”
At Lane, which manages 23 properties comprising nearly 3,400 guestrooms, DeForrest stresses sound operating principles that focus on service—not services.
“(We’re) really trying to look at our business and say, ‘Let’s make sure that we don’t confuse services with service.’ … We want to make sure we continue to deliver a great experience for our guests, but there may be things that we’ve done in the past that don’t have the value today.”
Examples of areas that could be cut back are 24-hour room service, 16-hour concierge service and the number of nights a restaurant is open.
Additionally, DeForrest said his team at Lane is “prioritizing our capital and being very frugal with our capital. It has to have a significant guest impact to be considered.”
To gauge that guest impact, he advised hoteliers to “really make sure that they’re staying very close to what their customers are telling them.” Guests’ needs are changing rapidly in the current environment, so it’s never been so important to talk to them, DeForrest said.
If and when a decision needs to be made, hoteliers should first consider the long-term implications.
“The thing that we’ve seen is whether it’s the really good upside or the downside, it’s never going to stay that way forever,” DeForrest said. “You have to be able to move quickly, but remember that a real-estate investment like a hotel has a 30- or 50- or 60-year life. You don’t want to make short-term decision that will affect the long-term value of that real estate and the long-term perception of the guest.”
Using this strategy, DeForrest has charted a relatively stable course for Lane Hospitality. Though the management company is “certainly seeing hits across the board,” the president and CEO said he hopes to translate the company’s experience into growth in 2009.
“We will grow our portfolio, primarily on the third-party management side,” he said. “We’ve got a really strong management platform. We’ve managed through these cycles before. We think we can add a great value to owners who maybe haven’t been through a cycle like this.”