Presidential elections create a great deal of economic uncertainty, and that’s been particularly true in 2016. Now that it’s over, hoteliers share what they think this election will mean.
REPORT FROM THE U.S.—One week after the U.S. presidential election, Americans and people around the world are imagining what might result from an administration headed by President-elect Donald Trump.
This year’s election created a great deal of uncertainty in the hotel industry, for both hotel companies and guests unsure about how the U.S. economy would progress. International companies were watching as well to see how the next presidency might affect travel and global relationships. Arne Sorenson, president and CEO of Marriott International, wrote an open letter to Trump, expressing sentiments that no doubt others in the industry share.
Hotel News Now asked hoteliers in the U.S. hotel industry to share their thoughts on the impact this particular administration change might have on their business moving forward. Here’s what they had to say, and feel free to share your thoughts in the comments section below.
Has any degree of uncertainty ended for your company or for your corporate guests, now that we have a winner?
Raymond Martz, EVP and CFO at Pebblebrook Hotel Trust: “We’ve seen corporate demand weaken throughout the year and across the country. It’s hard to know how much of this was attributable to the uncertainty surrounding the election, versus overall weakness in global growth and the decline in business investment. However, we think this has been a minor factor.
“With the Trump victory, which clearly was a surprise to the capital markets, uncertainty has increased. Unlike Hillary Clinton, who provided very detailed plans on her economic, tax and domestic policies, there is very limited detail from Trump on these areas. So other than infrastructure spending, it’s uncertain what the Trump administration has in store for the business community, including the hotel industry. So in this regard, uncertainty likely has increased versus if Hillary Clinton won the election.”
Doug Dreher, president and CEO of The Hotel Group: “It’s been a grueling election process and the most divisive in modern times. Now that the election has ended, there is probably some overall relief due to election fatigue. On a business front, there have been a number of regulatory and burdensome mandates affecting our industry of which we are optimistic the tide will be turned. Small business can be a catalyst for employment growth, and our industry is one of huge opportunities. As such, we see some solid growth opportunities under a new administration and proverbial fresh set of eyes going forward.”
Bashar Wali, principal and president at Provenance Hotels: “Uncertainty is starting to ebb, even if that’s only because we have certainty about who will be president in 70 days. Honestly, until a president takes office and begins to influence policy, the effect their administration will have on the overall business climate and on the travel sector specifically is naturally going to be somewhat uncertain. Beyond uncertainty, this year is unique. Whether you are happy or not with (last) Tuesday’s outcome, the election cycle has been traumatic and divisive. It will be a process but, with enough time to heal and recover, our country will return to steady ground.”
Joseph Bojanowski, president of PM Hotel Group: “Anything around labor-related pressures on our industry, specifically for us on our hotels, we have a lot more certainty around that, specifically with the overtime exemption rule that goes into effect 1 December. We feel there’s a stronger possibility of delay on that. … Even if the delay doesn’t happen, it’s highly unlikely after 20 January the approach to that wage increase for the overtime exemption rule won’t be more reasonable.”
How do you believe the president-elect’s positions will affect the U.S. hotel industry during the next four years?
Martz: “Trump wants to reduce taxes and regulations, which (is a) positive for businesses, including the hotel industry, so this should help growth. ... On immigration, it’s uncertain. Making it harder for people to travel to the U.S. is not a positive for the hotel industry, or our economy in general, which we saw firsthand after 9/11. So if Trump takes a tough stance on all types of inbound travel, that’s not good. But we’ll see if the rhetoric during the campaign is followed through with stricter immigration policies. Most hoteliers agree that immigrants to the U.S. serve an important part of the hotel industry’s workforce, so we’ll have to see what approach Trump takes in this area.”
Dreher: “Well, the president-elect is in fact a hotelier and a successful business person, so notwithstanding one’s political beliefs, we are sanguine about a net-positive effect during the next four or even eight years. It has been a rare occasion having such an outsider in the Oval Office and one without any government or military experience, so it will be interesting to see how it all comes together.”
Wali: “Like everything about the president-elect’s campaign and overall approach to politics, it is difficult to predict. On the positive side, he is in our business. So, at the very least, we can hope decisions made by the incoming administration will have the context of the industry in mind. I could see him bringing this to bear on various issues that might benefit the industry—from the regulation of home sharing services to the influence of labor unions to business regulations at large. On the other hand, one has to question what the implications of his stated social policies—be it healthcare or immigration—might be for our employees. And, of course, the real variable is how international tourism may be affected, not just by the rhetoric but by policies that could influence ease of access through visa regulations or restrictions.”
Bojanowski: “Specific to demand, there’s a real question as to international reaction to this election and the effect Donald Trump has on people’s desire to travel to the U.S. Whether that’s a slow down or an actual decline … we don’t know yet. We feel there’s going to be a negative reaction and that there could be a slowdown or decline in foreign travel to the U.S. This is a place where a lot of people want to come to, but it might (become) a place people don’t want to come to. There’s tremendous negative reaction around the world.”
Will your company adjust its operations in any way as a result of this election? If so, how?
Martz: “(It) doesn’t change our investment strategy or approach to the business. We run our business with a long-term perspective.”
Dreher: “Not at all. It is business as usual for THG, and (we’re) optimistic about the future of both our industry and our great nation in general.”
Wali: “At this time, we don’t anticipate changing our approach to business. We treat our customers, employees, partners and the members of our community fairly and with respect. That’s not going to change. And, to be honest, the country is not defined by the president, nor does a president single-handedly determine our fate. The overall economy has already proven it is resilient, and initial dips in the markets seem to be righting themselves. That, to me, is more meaningful than speculating on what may be to come.
Bojanowski: “We will not adjust our operations until we have a better understanding of what the impact is going to be. On (the day after the election), we had a meeting with our revenue team. We do have a daily report being produced now on key markets like New York City, Washington, D.C., San Francisco and Los Angeles—the kind of markets that are gateway cities. We’re watching very, very closely the cancelations occurring in hotels, the origins of those reservations. We’re also tightly monitoring the origins of reservations made in our hotels outside the country and the pace of those reservations. … There’s nothing alarming yet. We’ve seen some, but not at a level that’s alarming. The sample size is not statistically valid at this point in time.”
Additional thoughts on the results of the election:
Martz: “It looks like Alec Baldwin will now be a permanent cast member on (Saturday Night Live), so we have that to look forward to.”
Dreher: “In our humble opinion, no matter who we all voted for, it is time to put aside polarization on both sides and come together as a country. The president-elect has the bully pulpit and hopefully will set a refreshed optimistic tone. The president has expressed a positive transition of power the past couple of days and taken the high road, which says a lot about his character—that being country above party. In the end, we all have to remember how grateful and blessed we are to live in the best country in the world. We aren’t all perfect, yet our diversity, values, and strong democracy is unmatched in the world.”
Bojanowski: “Being based in Washington, D.C., and having a number of hotels in the area, a change in administration is a really good thing for demand in D.C. Inauguration is a good thing for demand. With the ‘drain the swamp’ approach from Donald Trump, we expect significantly higher levels of activity and demand for hotels around this election, in particular because the claims of essentially wiping out the status quo and everyone in it means new people coming in.”