One of the fun perks that goes along with this gig is sitting on planning committees for industry conferences. Last week I was in Atlanta with a group of industry movers and shakers to discuss the 2011 Hunter Hotel Investment Conference. I left with 20 thoughts that helped reaffirm my feeling the hotel industry is only beginning to see a recovery unfolding.
1. The word in special servicer circles is that for every one deal a special servicer closes, they get five more to work on.
2. The prevailing wisdom in the hotel industry is it’s time to start thinking about what’s next rather than just trying to stay even.
3. The relatively stable London Interbank Offered Rate (LIBOR) has kept a number of hotel companies in business and a lot of deals alive. Any unexpected increase in LIBOR could prove to be problematic for some hotel executives.
4. Quote of the day: “The last three years have been the emotional rollercoaster of a teenage girl. The emotions are much bigger than the performance.”
5. Banks are beginning to be more realistic about what assets they want to hang on to and what assets they want to churn.
6. Job placement is starting to pick up for this year’s college graduates.
7. By most measures, South Florida had a great spring.
8. Pricing power for weekdays is beginning to show some backbone.
9. Revenue per available room might be stabilizing, but it won’t be until late 2011 or 2012 before it becomes positive.
10. There still is some thinking that there could be another decline in industry fundamentals. Such a double dip wouldn’t be too surprising, but clearly everyone is pulling for the industry to keep moving forward.
11. There are a large number of people waiting for hotel transactions to materialize, but they aren’t interested in taking trash properties.
12. Owners continue to be extremely creative on the operations side of the business to pay the mortgage.
13. A lot of the assets in trouble are owned by quality operators with an emotional tie to the property.
14. There are some optimistic trends occurring in the hotel industry, but there are substantial headwinds.
15. Quote of the day No. 2: “Developers will develop as long as lenders lend. That’s the governor in the whole thing.”
16. The hotel industry will be one of the beneficiaries as consumer confidence continues to rise.
17. The best time for long-term planning is at the bottom of the curve.
18. The numbers for Manhattan have been getting better, and there’s belief they have matched or passed the numbers of 2005.
19. Construction-costs-per-square-foot in Manhattan is down 25 percent from its peak, and that is what is affecting values of assets.
20. Coming to terms with what future inflation will be is essential in figuring out the values of hotels.
As hotel owners everywhere are looking for signs an upturn is coming, they really need to look no further than key industry events—several of which are right around the corner.
The New York University International Hospitality Industry Investment Conference is less than two weeks away. The Americas Lodging Investment Summit Summer Update is scheduled for July, and don’t forget the Hotel Data Conference, presented by Gaylord Hotels, is scheduled for early August. The event, co-hosted by STR and HotelNewsNow.com, has been moved to the Loews Nashville Vanderbilt Hotel from the Gaylord Opryland Hotel because of the flooding in parts of Nashville.
And looking further down the road, don’t forget to check out the Hunter Hotel Investment Conference. There are plenty more ideas to be hatched.
