REPORT FROM THE U.S.—Depending on who you talk to, the results of November’s presidential election in the United States may or may not determine the future success of the hotel industry. But one thing is certain: The success of the economy and the success of hotels are in direct correlation.
“The president sets the tone, so anyone who supports the lodging industry is key,” said Marlene Colucci, executive VP of public policy for the American Hotel & Lodging Association. “The philosophy the president has trickles down to the industry.”
Colucci said the AH&LA does not endorse or support any one particular candidate, but rather the lobbyist organization aims to help officials in Washington, D.C., understand the importance of the hospitality industry to the overall economy.
“Our feeling is we’ll work with any administration,” Colucci said. “We just want the opportunity to be heard.”
Hoteliers, however, come down on opposite sides of the fence.
Pro-business
Robert Habeeb, president and COO of First Hospitality Group, which owns and manages more than 50 hotels, said whoever is elected in November will affect the hotel industry “in a big way.”
“The more I look at it, the more that I really believe that,” Habeeb said. “People are afraid to say it because it sounds very partisan, but I go through all these economic reports and American banks’ balance sheets, and it appears as if the uncertainty with the current administration has them waiting on the sidelines.
“They’re waiting to see what the end result of Obamacare will be, (President Barack Obama’s) tax policy … and they don’t have confidence that this administration is going to fix the economy.”
Habeeb believes if the president was unseated—and it appears the likely candidate to do so would be Republican frontrunner Mitt Romney—the business community would begin spending more money, which typically equates to more demand for hotels and more capital injected into the industry.
“Most people are feeling it, they just don’t want to articulate it,” Habeeb said. “I have yet to talk to a hotelier who thinks this administration is good for this industry. Hoteliers are scared to death about Obamacare. This is a gateway industry with a lot of entry-level people, and if we have to insure them all overnight, it would be devastating.”
Counter-punch
At least one hotelier would beg to differ. Tom Corcoran, chairman of FelCor Lodging Trust, said who’s in office has “nothing to do” with the success of the hotel industry, noting the industry has experienced its worst times when pro-business leaders were in office.
“One could argue that (President George W. Bush) was very pro-business, but one would have to admit that hotels lost more value in the Bush years than in many, many years,” Corcoran said. “In the case of the Great Recession we went through in 2008 and 2009, we all know now that was a result of over-lending, too much debt and the bank crisis. That was a very pro-business climate.”
Corcoran said the health of the general economy is the No. 1 driver of success to the hotel industry, but a pro-business leader doesn’t necessarily equate to a better economy.
“Everyone got rich during (President Bill Clinton’s term) and lost it during Bush,” he said. “I don’t think it has anything to do with the success of the hotel industry or the increase of values.”
Issue breakdown
President Obama has been praised, as well as criticized from hoteliers throughout his term. He was “rightfully criticized,” Corcoran said, early on for his comments about corporations holding meetings and conventions in Las Vegas. For that, among other reasons, Obama is perceived as anti-business, Corcoran said.
On the other hand, President Obama’s recent comments about legislation that would shorten visa request times “will be a great boost for us,” Corcoran sad. “The Travel Promotion Act was fought during the Bush administration but was passed and signed by Obama,” he said. “I think there’s a perception out there that he’s anti-business, but the facts are lately he’s done more to promote tourism … whether that will lead to higher (revenue per available room) we’ll see.”
Habeeb said visa reform is a step in the right direction, and the President “deserves a gold star” for his efforts on that issue.
“This administration has been forward-thinking on some things,” he said. “The creation of Brand USA—they deserve credit for that; the impact will be positive.
“But I think they need a grander plan for it to be meaningful. To the person (getting to the U.S.) is just too complicated. The process is more than they can handle.”
Corcoran made some concessions, and said because Romney is a former board member of Marriott International that he could be friendlier to the hotel industry.
“He’s got a better understanding of the hotel business than maybe the other guy,” he said.
“But I’ve always found that this country is stronger than who’s ever the president,” Corcoran continued. “We deal with whoever’s in office. We’re an optimistic group of people. The issue is what’s going to sustain economic growth. We don’t care about who the president is; we want good economic growth and steady RevPAR improvements.”
