One of the first things my brother-in-law did when he moved from Sacramento, California, to a small town in Northwest Ohio was join the local rotary club. Then he volunteered to plan the community’s Labor Day festival. Then he connected with the local young professional association. And the city sports association. And a handful of other clubs and organizations.

It might seem like an odd choice for an attorney at first glance. It certainly did to me. But when I asked him about it, his answer was succinct as it was savvy: It was smart business.

As a new face in town, the best way to attract clients was to show his commitment to the community. Although he came in as an outsider, he quickly established himself as someone who his neighbors could trust—someone with whom they could do business.

But the benefits of community involvement are not limited to the attorneys among you. As Bob Coleman tried to explain during a brief financing overview at last week’s Asian American Hotel Investment Conference, it’s also crucial for hoteliers (or would-be hoteliers) seeking financing. 

Don’t scoff. Coleman knows what he’s talking about. As editor of the Coleman Report, an author, a former banker and as a guest on both Fox Business News and CNN (as well as a HotelNewsNow.com columnist), he’s considered an expert in the realm of hotel financing.

So during his presentation, when he could have discussed government policy and interest rates and underwriting, attendee interest was piqued when he instead focused on the importance of getting involved.

“Who is lending today are the community banks,” he said. “… Community bankers are not tied to the financial matrix that the large banks are. Their mission is to support the community and revive the community.”

Bob Coleman addressed attendees at last week’s AAHOA conference.

Hoteliers are natural comrades in arms. And why shouldn’t they be? They provide jobs, venues to conduct business, restaurants and bars for entertainment and, most importantly, a place for outsiders to feel welcome and safe when they visit.

But these attributes don’t sell themselves, Coleman said. As hoteliers, you need to get out there to tell your story and make your presence felt. Have lunch at the same restaurants other community leaders do. Buy a $50 ad in the high-school sports program. Sponsor a float in the Main St. parade.

It doesn’t cost very much, Coleman said, but it makes a big impact—especially when you approach your community lender when you want to renovate or expand or build another property on the other side of town.

And even if you don’t need financing, you might see the same results as my brother-in-law. The more the community gets to know you, the more they’ll recommend you to friends and relatives and business associates. Maybe then your business will start booming.

And now on to the usual goodies …

Travel note of the week:
I leave tomorrow for a two-week sojourn to Europe with my beautiful wife. The trip includes first-ever stays in French cities Nice and Paris, as well as a stop at the Boutique Hotel Summit in London. I plan to poke my head in as many hotels along the way. Any recommendations (the same goes for restaurants)? Let me know via comment or email!

Stat of the week I:
34,000: The number of rooms projected to open three years from now. That number, which STR, HotelNewsNow.com’s parent company, reported in December 2011, isn’t all that surprising by itself. It’s only when you consider that when STR surveyed the development pipeline in December 2010, that same number was only 4,000.

STR’s Jan Freitag wrote a really interesting blog this week discussing the implications of this increase, which he says is a clear indicator that developers are eager to get back into the game after sitting on the sidelines for 36 months.

The bad news for hoteliers, of course, is that after a few years of virtually no new supply, the market’s about to get a lot more crowded.

“For the next few years, (average-daily-rate) growth is expected to continue to drive (revenue-per-available-room) growth. As new supply projects hit the pipeline and then open, supply growth could outpace demand growth, and then occupancies would decline and pricing power could ebb,” Freitag writes.

Stat of the week II:
1,000: Number of hotel projects (not rooms) 7 Days Group Holding Limited has in its China portfolio right now. I realize company pipelines are often inflated, but that’s still a mind-boggling number that speaks as much to the ambition of the company, which already has 376 properties in its domestic-only portfolio, as it does the opportunity in China.

Quote of the week:
“We don’t make these decisions in a little ivory tower.”
—Wyndham president and CEO Eric Danziger, defending allegations that the major hotel chains institute brand standards without first surveying owners and franchisees, during a heated general session at the Asian American Hotel Owners Association conference.

The brand executive panel at the AAHOA conference is always interesting, as the association skewers hotel chain leaders, asking them pointed questions in front of thousands of very vocal members. There’s nothing like it in the industry, quite honestly—with regards to both the heated rhetoric and candid responses from executives.

And while I understand AAHOA’s aim to champion the rights of its members, I think the angle here is starting to skew toward an unnecessary extreme. Brand standards are not inherently evil, and presenting this annual panel as an inquisition every year does a disservice to the association’s members. For every AAHOA member who bemoans what he or she sees as an “unnecessary” new standard, there is likely another member who is diligently maintaining his asset and deserves to have his or her brand equity remain intact. The only way to do that is to ensure consistent quality across the portfolio.

If I were running the show, I’d still keep most of the hard questions. Brand executives should be forced to defend their initiatives every now and again, especially when there’s a cost to franchisees. But I’d also ask owners about the importance of brand equity and what they’re doing to ensure value to franchisees.

(From left) Wyndham’s Eric Danziger and Marriott’s Liam Brown were grilled by panel moderator Robert Zarco.

Comment of the week:
“This association always has been the Hatfields and McCoys. It goes with the territory.”
—Commentor “asianamerican” discussing the highly politicized nature of AAHOA, which some prominent Asian-American hotel executives said will hurt the success of the association in the long run, as reported in “Leaders voice concerns over future of AAHOA.”

Email Patrick Mayock or find him on Twitter.
 
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