Editors recap the opening day of the Lodging Conference with takeaways, quotables and more highlights from the event.
PHOENIX—The first day of The Lodging Conference opened with a broad outlook on the economy, and while speakers didn’t shy away from talking about political uncertainties—specifically between the U.S. and China—the overall mood was positive.
Bernard Baumohl, chief global economist at The Economic Outlook Group, said the U.S.-China trade war is a “huge foot on the neck of the economy” right now, but pointed to some bright spots in the industry such as continued job growth and consumer confidence.
Confidence also hasn’t faded in the realm of brand launches.
Hyatt Hotels Corporation announced on Tuesday the launch of its 15th brand, Caption by Hyatt, which is in the select-service segment and focused on bringing people closer together.
It was also announced that Kokua Hospitality and Filament Hospitality are joining to form Sightline Hospitality, a third-party management company.
Photos of the day
Quotes of the day
“Hotels should not be owned by public companies. It’s crazy. It’s the most volatile asset class in the world. … It doesn’t lend itself to public capital markets.”
–Tyler Morse, CEO and managing partner of MCR Development, on the “View from the top” panel, questioning real estate investment trusts’ ownership strategies.
“We have to have more women on the slate. Hire the best person, whoever that may be, but right now we don’t have an equal number of women on the slate. So I ask all of you to take a little time in your own organizations to have a look at that. I know we’re looking at it seriously at Accor, and I am hoping more and more we’ll get 50/50 on all areas of our organization in terms of equality.”
–Heather McCrory, CEO, Central and North America region, accepting the Castell Award, which recognizes women leaders in the hospitality investment arena.
“Deal guys got to deal; we’ve got to go find some stuff.”
–Vamsi Bonthala, CEO, Arbor Lodging Partners, during the “Hotel investing 2020” session, on his company’s focus.
Tweet of the day
Discussing the latest hotel investing in 2020 and beyond, @AAHOA Treasurer Vinay Patel shared his insights on the Hotel Investing 2020 panel today at #lodgingconference with Greg O'Stean, Naveen Kakarla, Raj Contractor and Vamsi Bonthala. pic.twitter.com/8WyhXpV5Zu— AAHOA (@AAHOA) September 24, 2019
Slide of the day
Vail Ross, STR’s SVP of global business development and marketing, shared a snapshot of the leaders and laggards in the top 25 U.S. markets.
Data point of the day
U.S. hotel transaction volume is down, according to partner Adam Lair, HVS managing director and senior partner, citing RCA data. Year over year, total U.S. transaction volume is down 8%, driven by 10% declines in full-service hotel transactions and 2% declines in limited-service hotel transactions.
The first day of The Lodging Conference kicks off with numbers and the economic outlook, and I really did hear the audience let out a collective sigh of relief when Bernard Baumohl, chief global economist of The Economic Outlook Group, said, “We’re at a pivotal moment, and we’ve achieved something quite special, growing for more than 10 years. Fundamentals of the economy still look great.” He went on to cite factors like low unemployment, rising wages, strong consumer spending and ample capital, saying that “these are not the kind of symptoms of an economy that’s approaching a peak.”
Still, data analysts, owners and brand executives who took the stage on Day One found plenty to talk about. Uncertainty still plagues the mood of the industry, and while performance growth is happening, factors like converging supply-and-demand numbers and limping average daily rate growth give hoteliers pause.
Outside of the official conference programming, we spent the day talking with quite a few third-party management companies, who are all keen to differentiate themselves at this point in the cycle, especially given the behemoth deal uniting Interstate Hotels & Resorts and Aimbridge Hospitality. These companies are on the front lines of managing labor, optimizing revenue and dealing with profitability issues, so expect to see more movement, whether that’s mergers and acquisitions or just tooting their own horns, so to speak.
All industry players—owners, brands, management companies—remain hungry for their piece of the pie. They’re satisfied to hear that consumer spending is still high, and they’ll be taking that to the bank as long as they can.
-- Stephanie Ricca, Editorial Director
Hotel companies continue to launch brands, with the most recent news from the conference on Hyatt's Caption brand, and it sounds like hoteliers believe there's room for all if it is the right product in the right market.
On this morning’s "A view from the top" panel, Heather McCrory, CEO of North and Central America for Accor, said the company has 39 brands, but they’re “not portable across all parts of the world.”
Making a brand work is about delivering what guests want, she said.
As we approach the next downturn, it will be interesting to see how hoteliers’ perspectives on new brands change.
--Danielle Hess, Senior Reporter
From an investment standpoint, the deals environment feels very robust, mainly because there isn’t a ton of supply and pricing isn’t quite frothy yet, Vamsi Bonthala, CEO of Arbor Lodging Partners, said.
Going after the right deals means finding the right people to partner with, he said. He added that in a downturn, select-service will come out on top and bring the cash flow.
While labor challenges made headlines at past conferences, this year was a bit different. Bonthala said labor has not been brought up as much because it’s “become the new normal.”
“The model of how we’re running our hotels has changed over the last couple of years because we had to, dealing with this world of tough labor markets,” he said.
-- Dana Miller, Associate Editor