HNN asked CEOs and other top executives at the Hunter Hotel Conference what hoteliers should be doing now to prepare for the next downturn.
ATLANTA—It’s official—by unofficial hotel industry standards, at least—that we won’t hit a recession this year, according to speakers at this year’s Hunter Hotel Investment Conference. But keeping an eye on that next inevitable downturn is top of mind for hoteliers across all segments, and it was a big discussion topic during the conference.
Hotel News Now asked CEOs, owners and more: What should hoteliers concentrate on this year, given where we are in the industry cycle?
Here’s what they had to say:
President and CEO, Best Western Hotels & Resorts
“We’re still in the up cycle, so I would suggest strongly upping investment in sales and marketing and taking as much market share as you can. And invest in the product and service experience (to) build guest loyalty, because there is going to be a downturn, and when that downturn comes, you want a much broader customer base and also much more loyal customers.”
CEO, The Americas, InterContinental Hotels Group
“I think it’s a really good time to focus on your properties. I think it’s a good time to understand what the focused investments (are), the key strategic investments you can make in your properties to put yourself in a position for when things might slow down a little bit and you want to be in a strong share position. What are the technology investments you want to make? What are the renovation investments you want to make right now while costs are still pretty good?”
President and CEO, Choice Hotels International
“Make investments now because at some point, things will slow down to a much more normal rate. Get your projects done and open into 2018. If you’re going to invest in your property, do it before the end of 2018, and we’ll see what happens.”
President and CEO, Aimbridge Hospitality
“The fundamentals are still really good, and I’ll tell you as owners, we’re really focused on operating our hotels. We’ve kind of slowed down on transactions with the debt markets, so we’re saying let’s get back to the basics; let’s worry about top line; let’s worry about hiring good employees; let’s worry about taking care of the guests.”
President and CEO, Vision Hospitality Group
“This is a sustainable industry. People are going to travel; they won’t stop. Yes, growth can decrease, but usually it’s just that pace of change. As long as you’re staying disciplined to the model that made you successful, you’ll weather the storm. There’s an analogy of the big, bad wolf that comes every seven or eight years, that wants to blow your house down. We make sure we’re building a brick house, not a straw house. We can only worry about what we can control as a company.”
VP of development, Coakley & Williams Hotel Management Company
“I think that (owners and operators) should be looking at revenue, (and) where they’re at in terms of their license agreement. … We work with a lot of families, so (they should be) looking ahead at their 15-year plan and what they want to do down the road. … It’s a good time to have conversations about what people want to get out of their property, (and) what the long-term strategy is for their family.”
President and COO, HP Hotels
“From an owner’s standpoint, I think you have to look at where you are in the cycle. If you’re getting close to your hold period, you might want to be a net seller. From an operating standpoint, it’s getting back to the fundamentals (and) making sure you’re on top of the details and storing up some cash in the bank for when (the downturn) comes.”
COO, Affordable Suites of America
“I think we’re in the height of (the cycle) today. It’s still a good time to develop, especially if you’ve already got the plans on the table. It’s also a super time to refinance. The rates are at a record low; money is easy to come by; banks are hungry. … Development is wide open right now. I think you’ve got another three years of hot development time before the supply catches up to the demand before the cycle turns.”