Consensus: “bad.” Confidence: “good.”
Borrowing inspiration from a line from the old Mel Brooks “Young Frankenstein” movie (actually the quote is from Jim Hartigan at Hilton, but I’m going to take it as my own, thanks Jim!!!) this very accurately summarizes my current view of what is going on in the hotel industry today and what needs to happen before things will turn around.
After returning from last week’s ALIS, it is clear to me that most folks in our business have taken a very dour view of the next several years. While this view may be hard to argue with based on current economic and industry data, I feel that too many of us are just happy to go along with the consensus. Does it bother anyone besides me that with so many comments about the lack of visibility for the next several months and indeed years that most of the forecasts are so much alike?
My gut tells me that just the opposite should be the case. The forecasts should be exhibiting a wide variability—they shouldn’t all look the same.
It seems that for many people there is a certain comfort in running with the pack. Unfortunately, this kind of mentality tends to affect how the industry collectively manages both their expectations and their operations. That way, everyone can all be either right or wrong together.
There should be more creative thinking going on. If there were multiple forecasts with wide variability, it would create discussion around why they were varying outlooks instead of everyone blindly going down the same path. Then different companies would take different strategies, and it would create a more balanced industry response.
Again, this run-with-the-pack mentality is not unusual given the angst this kind of environment creates, but it sure doesn’t make it right.
My advice to anyone that will listen is to be very wary of comments that take any sort of comfort in or attach any reliability to a “consensus” forecast.
On another note, outside of an immediate demand revival, which none us expect before the second half of 2009 at the earliest, what the industry really needs is a dose of confidence. We have all seen these kinds of downturns before, not that any of them are ever very pleasant. But it does seem striking how morose everyone has become.
The economy will rebound in due course, and the lodging industry will recover—just like it always does. We all should be taking some comfort in the fact that we are much better at pricing our product, understanding our guests and making sound decisions than we were during past downturns.
During these extremely difficult times, I take a great deal of confidence in that.