NEW YORK—While operating performance continues to rise from the ashes of a deep recession, a shaky economic outlook created a “cautious” vibe at last week’s NYU International Hospitality Industry Investment Conference.
“The reality is we can’t be as bullish today as we were two or three months ago,” said Arne Sorenson, president and CEO of Marriott International, whose presence was prevalent at the conference after Marriott announced a deal to acquire the Gaylord Hotels brand just one week earlier. “The markets are a powerful read on future expectations, and right now they’re more cautious than they were two months ago.”
Sorenson outlined Marriott’s near-term strategies on a brands panel during the conference, saying Marriott will use capital to add brands and assets and enhance new growth platforms.
“How do we add a brand for India that allows us to add dozens and dozens of hotels?” he asked.
Debt for hotel acquisitions is available and deals are getting done, and the pace is expected to pick up during the second half of 2012, experts at the investment conference said.
Debt is “clearly recovering, it’s available—all traditional debt sources are active,” said Kevin Mallory, senior managing director for CB Richard Ellis Hotels. “Today we have a very active equity market.”
However, borrowers must be flexible and—most importantly—patient, according to members of IREFAC.
“There is money available for virtually everything, but borrowers have to be more patient,” said Michael Murphy, head of lodging and leisure capital at First Fidelity Companies. “It takes twice as long to secure capital today.”