What mergers-and-acquisitions activity can the industry expect in 2017? Hoteliers tackle that and other hot topics.
LOS ANGELES—Hot-button topics in 2017 so far include industry merger-and-acquisition activity, and managing through the uncertainties of change.
HNN asked members of the Lodging Industry Investment Council, which met in January in conjunction with the Americas Lodging Investment Summit, for their takes on these topics.
In the video above, the hoteliers share their frank thoughts on M&A activity to come; below, they discuss what the industry can expect in 2017.
'2017 will be the year of ___'
We asked LIIC members to fill in the blank, and their responses touched on a range of topics:
Phil Ribolow, director of real estate appraisal, Deutsche Bank
“2017 is going to be the year of surprises, because of the changes in Washington and the economic cycles.”
Gary Gray, CIO, Twenty Four Seven Hotels
“2017 is going to be the year of asking yourself, ‘what happened today?’ In other words, you’ll come home from work, turn on the TV and wonder what happened that day to change the world in connection with the new administration. It could be a good thing; it could be a bad thing.”
Timothy Dick, managing director and principal, Three Wall Capital
“2017 is going to be the year of taking nominal risk but mainly staying on the course, because of the uncertainties of future economic policies and policies coming out of Washington—the uncertainty of the unanticipated and the circuitous.”
Mike Cahill, CEO and founder, Hospitality Real Estate Counselors
“2017 is going to go down in history as the year that people who do not buy a hotel wish they would have in hindsight, because of the unbridled economic prosperity that (President Donald) Trump is going to bring to the economy. He’s focused on fueling the economy—manufacturing and jobs. If you can buy a hotel that’s priced right for today, and we can go into a period of 2% to 3% GDP growth, people will say they should have bought in 2017.”
Wei Deng, associate, Jeffer Mangels Butler & Mitchell
“2017 is going to be the year of the rooster, and from a Chinese person’s perspective, the year of tremendous uncertainty. Chinese people in particular have great apprehension of President Trump’s policies. He did not appear, when running, to be particularly friendly to the Chinese government. I think because the Chinese currency is facing great pressure to depreciate, it’s going to be exceedingly hard for Chinese investors to get their money out of China.”
Andrea Foster, SVP of development, Marcus Hotels & Resorts
“2017 is the year of a new world. It’s the new administration, the economy, the millennial mindset. We’re at the top of a lodging cycle and … I think we’ll be hovering for a while. We’re seeing unprecedented improvements in technology. We’re at a point where we make more purchases and decisions (on our phones) than we do on our laptops or tablets. Having choice, convenience and control gives us the ability to do things like check in at a kiosk or go straight to our rooms. Labor is another issue: We have low unemployment rates right now, but it’s a challenge to find staff, and I think technology will play into that. It’s a new world. We’ll see some things we didn’t necessarily anticipate.”
Jim Butler, founding partner, chairman of Global Hospitality Group, Jeffer Mangels Butler & Mitchell
“Because of … changes in hotel fundamentals, after 81 months of improving RevPAR, it looks like we may be at the end. Because of Trump’s drive for changes, the uncertainties will have an impact. Because of the movement that Trump exemplifies in the U.S., but is also seen in Brexit and Italy—the ‘give-the-power-to-the-people’ movement—and the change and impact it has on government and trade, and international exchange rates ... because of all of this, 2017 will be the year of changes—changes in labor policies (the push toward unionization, the living wage), recovering and adjusting from consolidations like Marriott and Starwood. And everyone is scrambling to become more efficient.”