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| Deloitte’s Adam Weissenberg (left) asks a question of Hyatt Hotels Corporation’s Mark Hoplamazian (middle) as Eric Danziger of Wyndham Hotel Group listens. |
LOS ANGELES—The momentum felt in the hotel industry during 2011 should carry forward into 2012, top executives from across the industry said during a panel of CEOs at the opening general session at the Americas Lodging Investment Summit on Monday.
“2011 was a very, very busy year for us and a really great year for us,” said Mark Hoplamazian, president and CEO of Hyatt Hotels Corporation. “Demand is up in most markets around the world.”
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Ed Walter
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Hoplamazian said Hyatt invested more than US$1 billion in the Americas region a year ago. The company acquired 20 LodgeWorks hotels for US$661.13 million and also introduced its Hyatt House design.
The panelists noted falling unemployment, a pickup in hotel deals and increased travel spend as positive signs for the immediate future of the sector.
“I’m fairly encouraged by the macro-environment, which I think sets us up for growth,” said Ed Walter, president and CEO of Host Hotels & Resorts.
Debt crisis
Still, headwinds remain for the sector, the panelists agreed. “It wasn’t universally smooth sailing” in 2011, Hoplamazian said.
However, fallout from the European debt crisis is one area for concern, as it could further restrict lending, Hoplamazian said.
“The one thing we learned in ’08 and ’09 is that the interconnectedness across the world is absolute,” he said.
Eric Danziger, president and CEO of Wyndham Hotel Group, though, said U.S. travel trends should not be affected by Europe’s debt concerns. “Irregardless of what’s going on in Europe, mom and dad and kids want to travel if they can,” he said.
As for looming debt maturities in the U.S., Walter said 2012 could see an increase in bank sales of hotels. “Lenders are of a mind that now that this is the time to deal with the maturity date and refinance issue,” he said.
Room Key
The executives also spent time during the session discussing the launch of Room Key, a new distribution channel started by six of the hotel sector’s biggest brands.
Wyndham is one of the companies offering rates and availability direct to Roomkey.com.
“This is not just to take back the customer,” Danziger said of Room Key, “but to take back the customer relationship, provide a better cost structure for the customer and have a friendly relationship with the (online travel agents).
“Shouldn’t we all provide consumers what they want, which is options?” he said.
Panel moderator Adam Weissenberg, vice chairman at Deloitte, asked whether the hotel companies are now competing with the OTAs. Danziger responded by mentioning the loyalty programs introduced by the OTAs. “Isn’t that competing with the brands and their customers?”
Hoplamazian said it’s a good thing for hotels that there now is another distribution channel available.
“The more places you have your product, the more likely you are to sell it,” he said.
