The success of Jim Burba’s hotel investment conferences—of which there are many scattered throughout the globe—relies on two key cornerstones.
The first is content, as embodied by the robust conference programming that comprises general sessions, breakouts, keynotes and the like. The second is the broader health of the industry and investors’ willingness to do deals as a result.
Jim’s a type-A guy who likes control, which is why his conference agendas are always top-notch. He has the power to make them so. The deal activity, however, is entirely out of his hands. He can influence positive industry fundamentals no more than I can will the Cleveland Browns to a Super Bowl championship.
That’s why Jim’s shows serve as an excellent barometer of investment activity within the hotel space.
When I first started attending back in early 2008, the hallways were lively and buzzing, with the big dogs spending more time generating deals than attending general sessions.
But when the rug was wiped out from under us in preceding years, the crowds started shifting out of the hallways and into the meeting rooms. With no deals to do, it was time to hunker down and learn a thing or two.
STR’s Randy Smith was one of many ALIS presenters and attendees who offered an appropriately optimistic perspective.
This year’s Americas Lodging Investment Summit, which wrapped up Thursday at the JW Marriott at L.A. Live, more closely resembled those frothy days of early 2008. Case in point: Tuesday’s opening session featured a somewhat sparse crowd in the expansive Nokia Theatre. Was overall attendance for the show down? Hardly. With more than 2,500 registered delegates, it was Burba’s third-largest ALIS ever.
But a bigger proportion of that roster ditched the on-stage dialogue to draw up contracts and sign the dotted line back in the hotel lobby or out in the California sunshine instead.
When a brand executive was introduced during a crowded media function Wednesday evening, for example, his absence was kindly explained by a giddy PR rep: “He’s closing a deal!” she shouted from the back of the room.
That’s a great thing for our industry (and Jim Burba). It means we’re approaching a state of normalcy. The conference in general was teeming with a sense of optimism—not the hysteric euphoria that sprung prematurely in the early days of recovery but rather a matter-of-fact nonchalance planted more firmly in reality.
It was if the hotel community had come to the same conclusion: “Challenges remain, but things are pretty darn good.”
“It’s really finally good to see demand growth exceed supply growth for a sustained, long period,” said Randy Smith, co-founder and chairman of HotelNewsNow.com parent company STR, during a data presentation. “Really the only one other time we saw that was from 2005 to 2007. This is really nice.”
Art Adler, managing director and CEO of Jones Lang LaSalle Hotels-Americas, later observed: “Investors see the industry as a relatively safe place to invest.”
One of the more indicative debates during Thursday morning’s Industry Real Estate Finance Advisory Council panel was whether this cycle would last five years or seven.
Regardless of the answer, it appears the hotel industry—along with Jim’s shows—are in for a strong run for many years to come.
Now on to the usual goodies …
Stat of the week I
5.7%: Projected increase in revenue per available room for the U.S. hotel industry in 2013, according to a new forecast from STR. Occupancy and average daily rate are projected to increase 0.8% and 4.9%, respectively.
Stat of the week II
58.2%: RevPAR increase for hotels in Washington D.C., in the week preceding the Presidential Inauguration (13-19 January), according to STR. The ceremony took place 21 January.
Stat of the week III
10%: Projected increase in deal volume for the U.S. hotel industry, according to Jones Lang LaSalle Hotels.
Quote of the week I
“Together we’ve accomplished a lot but much more needs to be done and many challenges lie ahead.”
–Joe McInerney, president and CEO of the Americas Hotel & Lodging Association, giving what might be his last ALIS address during the conference opening plenary session. McInerney will explore other opportunities when his AH&LA contract expires this year.
Quote of the week II
“This whole dysfunction and uncertainty is sort of becoming the new normal. It has to be built into your risk model. It’s a risk of doing business today.”
—Steen Petri, VP of acquisitions and development for HEI Hotels & Resorts, during a breakout session at ALIS.
I heard this sentiment repeated often during the three-day event, to which I can only reply: It’s about time. Hoteliers have used “uncertainty” far too often as an excuse during challenging times. As my colleague Shawn A. Turner pointed out back in August, keeping an eye out for the black swans is one thing. Living in fear of them is something else entirely.
Comment of the week
“I wonder why is the industry always complaining and grumbling about lack of quality skilled manpower, when the Industry is totally unwilling to do something about it. Industry must put its skin in the game and become co- creators and developers of the required talent and be ahead of the curve.”
—Commenter “K.V. Simon” responding to the challenges described in “Emerging markets fraught with development risk.”
The guy knows what he’s talking about. Simon, regional VP of the AH&LA’s Educational Institute, is based in Mumbai. He sees firsthand the problems—and more importantly, the potential—in emerging markets like India.
Email Patrick Mayock or find him on Twitter.
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