It’s rare that a conference keynote presentation begins with a joke about the Kinsey Reports—those controversial analyses of sexual behavior penned by Dr. Alfred Kinsey and others. But then, there’s hardly anything about a Laurence Geller address that fits the typical mold.
Geller, the boisterous head of Strategic Hotels and Resorts, is never one to hold back, whether at the podium or while working a room. This makes him an utterly delightful resource for us journalists—a man who’s not only vocal on all subjects but incredibly quotable to boot. And, as a respected hotelier within the industry, he’s also a great source of insight.
These qualities were on full display in November when Geller spoke during the Perkins Coie’s Navigating Troubled Times in the Hotel Industry conference, a presentation which I came across while combing through old notes and recordings during some holiday downtime. (It’s hard not to miss a recording in which one of the first few sentences uttered are, “How many of you have sex every night?”)
Strategic Hotels & Resorts' Laurence Geller said hotel values will go up substantially in 2011 and 2012
His comments about 2009 and thoughts about the New Year are prescient. Here are some highlights:
• On the subject of discounting: “We’ve cut the rates so much … it’s going to take us into 2011 to get us back to some form of natural curve to where it (should be),” he lamented. “We’ve given away 25 percent of our profits for sheer, sheer stupidity. “
• Geller expects the first quarter of 2010 to be horrible. Make that “really horrible.” Rates that were on the books for the first part of 2009 will make for particularly terrible comparisons.
• When gauging hotel performance in the coming months, don’t focus too much on revenue per available room. “Don’t look at RevPAR,” he said. “The statistic you should be looking at is demand. Demand sets pricing. If demand grows, pricing will come. … I think absolute demand will gradually creep up.”
• Business travel will strengthen in 2010. “The two indicators are Tuesday and Wednesday. Watch those two nights. Those are your business demand indicators.”
• Regarding loan extensions: “(Lenders) don’t want (the asset) anymore than you want it. They’ll extend you out. … The less you pay, the more the conditions. The more you pay, the longer you’re going to get and the better conditions.”
• “Lenders are called lenders because they have a job. Anybody know what their job is? Lending!”
• On the topic of values: “2011 will be a fairly good year for borrowing for low loan-to-values. Values will go up substantially in 2011, and then again in 2012.”
• When will the industry finally see recovery? “The second half of next year, if we don’t have a catastrophe somewhere, looks pretty neat.”
And what about that Kinsey joke, you ask? It’s a bit lengthy for this blog. But if you’re really intrigued, drop me a line and I’ll fill you in.