Editors recap the opening day of the Hotel Data Conference with takeaways, quotables and more highlights from the event.
NASHVILLE, Tennessee—As hoteliers came together on the first day of the 8th annual Hotel Data Conference Wednesday, experts revealed fresh forecasts and panelists discussed the latest trends in data, transactions, capital expenditures and more.
STR, parent company of Hotel News Now, joined other data analysts in releasing revised industry forecasts for 2016 and 2017, and while the expectations first announced in January won’t likely be met, hotels in the United States are still seeing signs of growth, even if it’s slowing growth. After a day of panels and data breakout sessions, Wednesday’s schedule ended with a “debate” between hotel owners and the online travel agencies on the latest sticking points in the distribution discussion.
Here’s a recap of Day One of HDC, compiled by the HNN editorial staff.
Photos of the Day
Quote of the Day
“I say it’s not the time to panic. I think it’s OK to accept that growth is going to slow. Growth is going to stall. But in the absence of some unforeseen major event, I don’t think we’re staring at the brink of a fiery crash.”
--Carter Wilson, STR’s VP of consulting and analytics, during Wednesday’s general session.
Tweet of the Day
Slide of the Day
From the opening discussion about how long the hotel industry’s after-party would last to the closing cocktails shared during the distribution debate, HDC’s vibe was optimistic and subdued at the same time.
The biggest issues of the day focused on the impact of Airbnb on hotels and the inability to dramatically increase average daily rates during what most pundits consider the most successful run in the U.S. hotel industry’s history. That’s particularly interesting when considering that approximately 35% of the event’s attendees are in revenue management. At the very least, maintaining the current rate landscape will be important to stave off the downturn that appears to be creeping into the picture.
All in all, the day can best be described as informative. The industry and economic overviews, Choice International CEO Steve Joyce’s insight on forecasts from STR and CBRE and the open dialogue about distribution challenges provided a real look at the issues facing the industry going forward.
--Jeff Higley, Editorial Director
It’s great to hear speakers underpin their statements with data at this conference; I think it lends a helpful dose of reality. Steve Joyce, president and CEO of Choice Hotels International, received lots of smiles and nods from the audience when he said he notices that a more disciplined lending environment in this cycle has gone a long way toward keeping supply growth as muted as it has been. Still, supply was on the minds of many participants and speakers throughout Day One of the conference. In the “Pipeline in motion: What’s the score?” session, we learned that the upscale and upper-midscale chain scale segments are far and away leading the pipeline charge. Not surprisingly, the shift in the U.S. pipeline has been from hotel developments with thousands of rooms to projects averaging out at 150 rooms or fewer. It’s all pointing to the new normal of the U.S. hotel landscape, which is one of continued—yet muted and somewhat different—positive growth.
--Stephanie Ricca, Editor-in-Chief
It remains true that hoteliers cannot make money without first spending it, with the second fast rule being that the smartest among them know that all the players in the capital-expenditure chain have their part to play in making sure that every dollar spent from their budgets adds value to the asset, prepares the asset for its eventual exit and sweats the asset to maximize return on investment.
To do that in this current competitive market, which comes with increased brand creep in the upturn, the principal points stressed in the panel “The cost of CapEx” were that hoteliers need to have long-term CapEx plans in place, and the benefits must be communicated to everyone. It’s more important than ever to have a firm understanding of what the asset is, what management wants from it and where it is envisioned it will sit in its competitive set in the next year, five years or more.
George O’Brien, VP of business development of owner and management company Fillmore Hospitality, spoke of needing that belief now more than ever and looking at each individual asset on its own strengths and future positioning. Michael Morton, VP of owner relations at Best Western Hotels & Resorts, agreed that CapEx today is not a matter of offensive versus defensive spend, but rather proactive or reactive, and that owners have to be aware of what the brands regard as necessary to increase market share.
Proactive will win the day as long as owners, brands, developers and designers, etc., are aligned, and if the CapEx plan is right for the property, the guest and profit-and-loss accounts will be the ones to benefit, regardless of what the spend is. There is the tendency to spend much CapEx on guest-facing initiatives, and these certainly are of vital importance, but a well-thought-out CapEx plan with all the players aligned will still see dollars invested in bricks and mortar.
--Terence Baker, Reporter, Europe
While attending the opening day of my first-ever HDC, I tried my best to absorb as much of the data breakdowns and panel discussions as I could. While the distribution debate brought some fresh perspective on both sides of the OTA/direct booking argument, the top 25 markets data dash led by STR’s Brad Garner gave me the best amount of digestible takeaways.
The supply and demand problems in markets like New York City and Houston are a lot clearer. Forecasts for both cities aren’t promising, as Houston should see a 5.2% supply growth in 2016, and New York will see a 5.1% supply increase by the end of the year. Both cities are the two poster children for oversupply’s slow creep on performance, but as Garner emphasized, slowing growth is still market-specific, and most of the U.S.’s top 25 markets have either reached or surpassed their previous peaks. There’s still some time left in the current cycle, it seems, even to a rookie in the industry like me.
--Dan Kubacki, Associate Copy Editor