The hotel industry’s most overused clichés
12 AUGUST 2015 6:55 AM
The hotel industry is awash in awful phraseology that has become so ubiquitous that it now borders on almost meaningless. Here are some of the worst offenders.
Everyone wants to know what inning we're in. It's difficult to say, because the hotel industry is not at all comparable to a baseball game. But just as we’re seeing the industry break all sorts of records, we're also seeing a huge increase in awful phraseology—catchy little phrases intended to break down complicated subjects into digestible sound bites.
We’re going to discuss some of the most overused phrases we’ve been hearing and discuss how they relate to the state of the industry today.
What inning is it?
This is perhaps the most overused phrase that is asked of panelists at conferences whenever the hotel industry is the midst of a growth period. It is essentially another way of asking people to predict how far we are from a slowdown or downturn in the economic cycle, which is nearly impossible to foresee.
However, by phrasing it as “what inning is it?” the question focuses on where we are now in the economic cycle, which may appear to be an easier inquiry.
Certainly we are in a period of expansion, and dividing that unknown time frame into innings is somewhat nonsensical. Most people play it safe and respond that we are in the middle innings because we are beyond the initial expansion period, but hopefully we are not nearing the end. However, no one considers that the game could go into extra innings or be called due to inclement weather.
If we want to mix metaphors, we can talk about innings and then make a comment about how much runway we have left.
Like innings, “runway” refers to how much time we have left before things go bad. So if we're in the seventh inning, we're starting to use up all of our runway. This is a bit dramatic, of course. When the hotel industry reaches the end of the cycle, revenue per available room decreases. When a plane speeds though the end of its runway, it's a bigger problem.
“Froth” is the mass of small bubbles on top of a liquid often caused by some sort of agitation, like pouring a carbonated beverage.
Similarly, “frothy” is used to describe an investment environment where the prices of assets are rising above their real value due to high demand. Certainly, transaction prices for the hotel industry are at an all-time high and continue to rise as cash flows increase and market fundamentals remain strong.
Whether investors are overpaying for assets remains to be seen as the return on investment over the hold period is the only true way to evaluate a good investment.
No, supply creep is not a villain from “Scooby Doo” or a character on “The Walking Dead,” although it does have a negative connotation. Supply creep refers to the acceleration of new hotel development with the pace of new room additions increasing every month.
While this might be a concern for a few markets like Manhattan or Houston, the current rate of new hotel construction isn’t really that scary as overall supply growth for the industry remains well below the historical average of 1.9% annually.
The phrase “Goldilocks economy” was actually coined back in the 1990s where the economy was perceived as being “not too hot and not too cold.” Obviously, it harkens back to the story of “Goldilocks and the Three Bears,” which was first published in 1849.
The term has been revived over the past year to refer to current economic conditions where the economy is growing at a relatively steady pace with unemployment on the decline and inflation in check. When you consider that the United States experienced the longest period of economic expansion in history during the 1990s, a Goldilocks economy might be “just right.”
We hope that our explanations of these various overused clichés in the hotel industry put you on the right track to understanding what they truly mean and how silly some of them may be. Until next time, let’s continue to move the needle, and we hope nothing keeps you up at night.
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