Meet the Money always provides a wealth of insight into hotel finance. While the “money” part of the 19th annual conference was as elusive as ever, panelists provided guidance on everything ranging from leverage to dealing with receivership. Here are 10 take-home thoughts from the conference.
1. “For every 100 basis points increase in leverage, it has been accompanied by 40 basis points decrease in annual returns.”
-John Arabia, managing director, Green Street Advisors
2. “Housing is the ball game. There is no better lead indicator.”
-Richard Green, director, USC Lusk Center for Real Estate
3. “I was at the Real Estate Roundtable, which tries to negotiate and give input on treasury regulations. … And we heard things will get better in weeks, not months. (Ben) Bernanke said we’re no longer falling off the cliff.”
-Tom Corcoran, chairman of the board, Felcor Lodging Trust
4. “The most important thing right now to consider is the demand side of the equation. Supply is an issue, but nothing’s going to change until demand improves.”
-Mark Lomanno, president, Smith Travel Research
5. “There has to be a replacement for CMBS. The wall is there.”
-Bruce Wiles, COO, Thayer Lodging Group
6. “Value does come from the management—you’re going to have a better business on the other side.”
-Larry Broughton, president and CEO, Broughton Hospitality Group
7. On grassroots efforts in this economy: “Focus on value preservation and enhancement. We renegotiated our trash contracts, life and fire policies … every agreement involved with vendors should be looked at.”
-Kevin Mahoney, COO, Stonebridge Companies
8. “If the lender understands what you’re going through, they can start to think differently. … Anyone who comes up with a plan to simply tread water is going to run into a wall with their lender.”
-Jonathan Falik, CEO, JF Capital Advisors
9. “A lot of people don’t want to admit the true cost of capital.” Bruce Wiles, COO, Thayer Lodging Group
10. “We actually manage the day to day (in receivership), and it’s amazing what we can uncover that hasn’t been disclosed yet. It’s amazing how many ghosts there are. … When lenders are desperate, they do desperate things.”
-Mark Burden, president and CEO, Rim Hospitality
