When the more than 300 hoteliers settled in for the opening session of the Hotel Association of Canada’s 17th Annual Conference yesterday at the Toronto Hilton, the mood was ominous—and with good reason.
The country’s neighbor to the south was experiencing a staggering financial meltdown, the global economy was following suit, and the hotel industry was doing all it could just to keep its head above water.
So when Scotiabank’s chief economist Warren Jestin began his economic outlook with a dire declaration—there will be virtually no net growth in the global economy through 2010, he said—it appeared the mold had been cast and the day’s proceedings would follow the gloom-‘n’-doom blueprint of conferences past.
But then, remarkably, the Canadian outlook got a lot brighter.
“The good news is that Canada doesn’t have that type of leverage (that the U.S. economy has),” Jestin said. “Our banking system is rated as one of the soundest in the world. … As a result, we have remarkable stability here.”
As it turns out, Jestin wasn’t the only one who drank the cautiously-optimistic Kool-Aid:
• “We should ride through (this downturn) with a better occupancy (than in past downturns),” said David Larone, director with PKF Consulting. And he was just getting warmed up: “I think we’re in better shape to deal with this. With the systems that are available through the brands today, individual franchisees can basically land the space shuttle. Yield management has been something that we’ve been working on for 20 years. … The economy may not be a whole lot better than what we were looking at in ‘91 and ‘92, but I think we’re better equipped.” He also said that he is getting calls daily from potential investors who are sitting on piles of cash and are looking to get into the game.
• Stephen Foster, reporting on the performance of Starwood Hotels & Resorts Worldwide thus far in 2009, said “Q1 in Canada actually looks pretty solid.” When asked about the greatest opportunity to be had in this crisis, the senior vice president of operations said that the country’s relative stability compared to the rest of the world has created a chance for it to become a dominant force in the global tourism industry.
• Jonathan Lund, director of hospitality operations at Fortis Properties Corporation, said the downturn is the perfect opportunity to discover the leaders of tomorrow: “Out of this will surface the great leaders. We’re going to ask people to do a lot, and we’re going to find people who produce.”
• Robert Pratt, COO of SilverBirch Hotels & Resorts, cited solid group bookings through the first half of the year.
• Commenting on the Canadian government’s recent budget, which for the first time in decades, includes an economic stimulus specifically for the tourism industry (in the amount of CAD$340 million), Delta Hotels’ Hank Stackhouse said, “We’ve finally got our foot in the door!”
• Barry Sheen, VP of operations for Westmont Hospitality Group, championed the industry’s sophistication in holding its rates, adding that the downturn would only strengthen the managerial skills of hoteliers in the future.
To close the final panel, moderator Lyle Hall of HLT Advisory turned to the audience and asked, “How many of you feel more optimistic now than you did before?” Not surprisingly, the majority of attendees raised their hands. It seemed all the cautious optimism had rubbed off.
Or maybe they had all just drunk the Kool-Aid.