HNN recaps the top things to know from 2014 as part of its look back at 10 years of the hotel industry.
GLOBAL REPORT—Though the U.S. hotel industry didn’t know it at the time, it would hit its performance peak in 2014. For the next four years at least, fundamentals would remain solid and growth would continue, just at a slower pace.
The year started with industry confidence at a high not seen in years after strong performance in 2013. Hotel lenders finally caught up to the industry’s optimism, increasing competition among lenders and creating more favorable terms for borrowers. While no one was under the illusion this would last forever, hoteliers said they should take advantage of the strength of the industry.
“There will come a time when we’re overheated, but now the fundamentals of the business are so sound,” said Mark Elliott, then-senior managing director of brokerage Hodges Ward Elliott, which sold $4 billion of hotel assets in 2013. “The consensus of the industry is that this is a long cycle … barring any unforeseen geopolitical events. We have quite a ways to run.”
After success with its initial public offerings of Hilton and Extended Stay America in 2013, Blackstone Group filed an IPO for La Quinta Holdings in February 2014. The transition for Hilton proved to be advantageous for its development pipeline.
“We’ve done a very good job of completely transforming what was a good company with potential and what is a great company that is really executing and delivering and performing at the top of the market,” Hilton President and CEO Chris Nassetta told HNN at the time.
In 2014, hoteliers also continued their complicated relationship with online travel agencies and celebrated a dismissal of a pay-parity court case.
At the same time, the hotel industry was trying to adapt to the growing pressure of alternative accommodations. While this emerging industry proved challenging, some in the industry saw ways to learn from companies like Airbnb and HomeAway.
The industry’s early-2014 momentum carried on as forecasts and assessments asserted that, despite eventually slowing down, the hotel industry was on solid ground. That feeling continued through the rest of the year into predictions for 2015.
InterContinental Hotels Group closed out the year with its acquisition of Kimpton Hotels & Restaurants for $430 million in cash, bringing 62 hotels into its portfolio and creating speculation this could kick off a wave of consolidation within the industry.
Read through the stories below to see more industry news from 2014.