Article Summary: Editors recap the opening day of the Hotel Data Conference with takeaways, quotables and more highlights from the event.
Editors recap the opening day of the Hotel Data Conference with takeaways, quotables and more highlights from the event.
Primary Category: Conference Coverage
NASHVILLE, Tennessee—The 11th annual Hotel Data Conference sported a new venue—the JW Marriott Nashville, which opened in July 2018—and a decidedly different vibe, from its 10th edition a year ago, as cautious optimism among hoteliers faded and reluctant pessimism about an impending (but not immediate) recession of the U.S. economy crept in.
Day 1 recap video
Photo of the day
Quotes of the day
“If you’re looking for a canary in a coalmine and wondering if travel might be it, it doesn’t look like it will be.”
--Tourism Economics President Adam Sacks, in “Expectations and risk for the economy and travel.” He talked about how despite overall U.S. economic slowing—in business confidence and business investment—travel indicators remain positive, with high occupancies, continued consumer confidence and high household wealth.
“Expansions don’t die of old age; something will have to happen. … The last two (recessions) had some kind of a cause. There are things out there that could be leading to a recession. There are also things that could point to a very resilient U.S. economy. … Something will ultimately tip us into a recession in the next 10 years; I think we can all agree on that.”
--William Simone, senior director of topline revenue and competitive analysis at Marriott International, during a data session titled “Peak to Peak: 2007 vs. 2019”
Tweets of the day
Slide of the day
In Thursday’s general session at Hotel Data Conference, Adam Sacks, president of Tourism Economics, presented a slide on the probability of entering a recession between 2019 and 2020. Sacks shared these percentages and takeaways.
Data point of the day
86% of projects in the active pipeline range from midscale to upscale projects, according to Dominik Kozissnik, director of global census at STR, speaking during a session titled “Riding the pipeline’s 10-year high.”
A year ago at the Hotel Data Conference, there was cautious optimism that, to use a commonly cited baseball analogy, the hotel industry up-cycle could be headed into extra innings. But on day one of the 11th annual event, it felt more like bottom of the ninth with two outs.
The day featured three panels with the word downturn in the title—“Chaos or control? Pricing in a downturn,” “Downturn preparation: Staying ahead of the curve” and “Labor costs in the downturn”—and three others where it was certainly implied—“End of the upcycle? The industry forecast,” “2020: Entering the ‘Great Unknown,’” and “Peak to Peak: 2007 vs. 2019.”
Talk of the timing (most ranging from within the next one to two years), potential causes (too many to list) and severity (probably not as bad as the last one) of a downturn creeped into virtually every session.
Speakers, of course, tried to temper their pessimism when possible.
At least for now, the economy is enabling more families to take vacations than in years past, Tourism Economics President Adam Sacks said.
So maybe the sunny days aren’t all behind the industry just yet, but the clouds are definitely forming overhead.
--Robert McCune, senior managing editor
A recession is coming. That’s probably a sentence hoteliers and investors don’t want to hear, but whether it’s next month, next year or next century, there will be another recession.
As hoteliers and economists keep trying to read the tea leaves on the broader economy, the one thing that seems fairly likely to me, and other people I’ve heard from during the first day and a half of the Hotel Data Conference, is whenever this inevitable recession hits, it will be very much unlike that last one.
That makes sense when you spend some time thinking about it. The last two recessions both had significant unique aspects that worked to the detriment of the travel industry. The recession following 11 September 2001 clearly came with a widespread fear of air travel. Excessive corporate spending was visualized by extravagant resort getaways for Lehman Brothers and other companies during the backlash from The Great Recession.
As of today, there’s no reason to believe the next recession will be so travel-centric, and that only makes the long-hoped-for soft landing all the more likely.
--Sean McCracken, news editor
The industry is expecting a downturn, but no one is sure when it will actually happen. It could be months or years.
While it’s uncertain when the cycle will end, speakers on the “Downturn preparation: Staying ahead of the curve” panel said it is important to prepare for it and be ready to get through it. One of the best ways to do that is by building a good company culture from the top down. Christine Herrington, VP of asset management at Park Hotels & Resorts, said hotels and companies need to have the right leaders in place who can execute a plan, and who can communicate the plan throughout the organization.
Speakers also pointed out that cutting rates doesn’t have to be the answer in the face of tough times. If companies have great people on property who interact with guests and make then want to stay at the hotel for that experience, they will come back again and again, regardless of rate.
--Danielle Hess, senior reporter
Hotels make up just a piece of the pie in the investment landscape, and investors are hungry to diversify their assets.
An interesting point I heard from Jamie Lane, senior managing economist at CBRE Hotels Americas Research, was that he predicts hoteliers will increasingly enter traditional office building spaces and convert 10 to 15 floors into guestrooms. The rest of the building would consist of flexible workspaces and activated common areas focused on a self-contained live, work and play compound.
Several hotels are already beginning to adapt this model by converting their own unused lobby spaces into co-working spaces. A way for hoteliers to earn some revenue is by charging non-guests to use the space, he said.
By understating other real estate sectors—such as retail, industrial and apartment—hoteliers can better adapt and move forward with this trend.
--Dana Miller, associate editor
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Headline: HDC Day One: Downturn jitters abound
Article Date: 8/16/2019
Article Time: 8:47:00 AM