ALIS: End of conference cues bright 2016
28 JANUARY 2016 9:09 AM
Despite some new challenges so far this year, attendees at the Americas Lodging Investment Summit are optimistic about 2016.
LOS ANGELES—While snowy weather on the East Coast might have kept some people away from the Americas Lodging Investment Summit, the conference ended on a sunny note Wednesday for those in attendance. Overall, the industry outlook in the United States remains strong, though hoteliers are keeping a close eye on new disruptors this year, such as a shaky stock market and increased foreign investment activity.
Photos of the day
Lyndall DeMarco, founder of the Youth Career Initiative and a long-time advocate of green initiatives throughout the global hotel industry, receives the ISHC Pioneer Award from ISHC Chairman Chad Sorensen (right) and ISHC Pioneer Award Chairman Christopher Cylke, during ALIS on Wednesday. (Photo: Jeff Higley)
ALIS attendees raised more than $1 million to support Shatterproof during the three-day conference. Shatterproof is a national organization founded by hotelier Gary Mendell to end the stigma of addiction. From left: Mark Woodworth of PKF-HR, a CBRE Company; Tom Corcoran of FelCor Lodging Trust; Mendell; and Jim Burba of Burba Hotel Network. (Photo: Jeff Higley)
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Quotes of the day
“The (Marriott/Starwood merger) is a continuation of a trend toward consolidation. It’s a natural evolution. Fewer, larger brand companies that have the capacity to provide their loyal customer base with a broad variety of options is a good thing.”
--Justin Knight, president and CEO of Apple Hospitality REIT, on the impact the merger of Marriott International and Starwood Hotels & Resorts Worldwide will have on the hotel industry
“We spend a lot of time studying China and oil; those are a couple of the key items around the recession talk. We wanted to call it and help our clients trade off of it, but we can’t convince ourselves there is a recession. So, we think it’s a mispricing. The general stock market might be priced correctly, but the lodging stocks are underpriced.”
--Mark W. Elliott, president of Hodges Ward Elliott, on whether the industry is facing a recession and stock market reaction to the industry during the IREFAC panel
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Transitioning. Challenging. Retooling. Those are three words that kept popping up in conversations during the three-day Americas Lodging Investment Summit. With stronger headwinds such as stock market jitters, continued concern about the Chinese economy and the probability of rising interest rates staring them in the face, hotel owners are being realistic about the future.
There were many warnings from various speakers that the industry should be careful not to talk its way into a downturn. I don’t buy that argument: The bottom line is that ALIS attendees will do everything they possibly can to keep the money train rolling down the tracks. They do need to have a talk with their general managers and revenue managers to ensure there’s not panic at the property level that results in dropping rates for no reason.
A number of operators I spoke with talked of a softer-than-expected January. Last week’s U.S. results from STR, the parent company of Hotel News Now, indicate a clear blip on the radar, but it likely won’t develop into a long-term pattern.
The best advice during the conference came from Mark Elliott of brokerage firm Hodges Ward Elliott during the final general session panel on Wednesday. He said he didn’t originate the thought and I’ll paraphrase: Good cycles don’t end because the clock runs out; they end because something happens. All hoteliers can do is be ready for when that “something” happens and keep their hands firmly on the rudders of their ships to ensure safe passage through any turbulent waters.
--Jeff Higley, Editorial Director
When you strip away all the rhetoric, it comes down to this: Hotel buyers are still buying, and (obviously) sellers are still selling. Business is happening, and I, too, heard warnings that the industry must take care not to talk itself into a recession when there’s no reason for it. For everyone I spoke with who was concerned about stock market fluctuations, I spoke with another who said the blip didn’t make any difference on his or her business.
What was most interesting to me was hearing about ways companies are differentiating and preparing now to keep business strong through the next recession, whenever that might be. I sensed a lot more planning ahead than I’ve seen before: companies taking care to invest in CapEx now, to adopt new revenue-generating F&B concepts, to invest in revenue management—all to be as ahead of the curve as possible.
--Stephanie Ricca, Editor-in-Chief
Asian money, and specifically how much of it will make its way to U.S. shores, was a topic of repeated interest through the three days of ALIS. But while the discussion for the first day centered around the idea of Chinese investors seeking safe haven with U.S. investors while their home markets go haywire, it was made crystal clear Wednesday that there are other motivators for Chinese investment in U.S. hotels.
During the “Asian investments on the rise in the Americas” panel Wednesday morning, Anbang Insurance Group Managing Director Philip Yee said that existing, high-profile properties in U.S. gateway markets like New York City and San Francisco remain the best long-term bets for his Beijing-based company.
Valuations “in New York City and San Francisco are fairly reasonable,” Yee said. “We think they’ll be very durable in the long run.”
--Sean McCracken, News Editor