ALIS Day Two: Finding upside in the new normal
 
ALIS Day Two: Finding upside in the new normal
25 JANUARY 2017 9:07 AM

Editors recap the second day of the Americas Lodging Investment Summit with takeaways, quotables and more highlights from the event.

LOS ANGELES—More than 3,000 attendees at this year’s Americas Lodging Investment Summit dove into the real task at hand during the second day of this year’s conference—talking about, and making, deals.

Despite potential pockets of uncertainly, seasoned hoteliers know that life and business goes on, and panel discussions on Tuesday touched on everything from the Wall Street perspective to today’s asset management challenges.

The widespread impact Marriott International’s 2016 acquisition of Starwood Hotels & Resorts Worldwide continues to have on the global hotel industry is an underlying theme to many discussions, playing a big role in the pervasive optimism in the halls at the JW Marriott.

Editors’ recap video

Photo of the day

R2-D2 proved he was the droid ALIS attendees were looking for, as he hung out by the conference information desk on Tuesday. Many companies showcased robot applications for hotels at this year’s conference. (Photo: Sean McCracken)

Quotes of the day

“If Trump is able to follow through and we have less regulation, spigots to the banks will open up so more transactions can occur.”
—Mark Lanspa, EVP, Wells Fargo & Company, during the “Wall Street Outlook” panel discussion.

“There are elements of the (Marriott International and Starwood Hotels & Resorts Worldwide) integration that will take longer, like the technology platform and loyalty programs. But we looked at development and said if we take on this ambitious timeline, we can get to the point where in 2017 there is no more integration work to get done. We didn’t want any excuses in 2017.”
—Anthony Capuano, Marriott’s EVP and global chief development officer, on the integration of Marriott and Starwood’s global development teams.

“Any deal that has cash flow can get financed. There’s plenty of money to be able to fund deals that make sense.”
—Neil Freeman, principal, Aries Capital, during a discussion about the state of hotel financing.

"I would've said internationally, but recently we've turned that spigot off."
—Trump Hotel Collection CEO Eric Danziger on where he’d like to see the company’s growth

Tweet of the day

Editors’ takeaways

“Uncertainty” has been bandied about during the Americas Lodging Investment Summit more times that one can count. What became clearer during Tuesday’s programming is that “uncertainty” doesn’t have to be “bad.”

In fact, unlike those brave rappellers who used their exhilaration to support the Shatterproof Challenge by scaling down the exterior of the JW Marriott at L.A. Live, the hotel industry doesn’t have to worry about going over the edge just yet.

There are major issues facing the industry, including the numerous CMBS deals that must be refinanced in the next few years, a supply story that is teetering on being out of control in some markets, the ever-increasing operational costs of doing business as a hotel owner, and the wait-and-see period regarding regulatory reform that President Trump promised.

The annual January gathering of hotel folks for ALIS serves as a perfect temperature gauge for those issues and more for an industry that has more clout than it realizes. The temperature thus far: What many industry executives and observers thought was going to be a so-so 2017 has turned into a year with a lot of potential upside—as long as executives are willing to roll with the punches.

For example, leaders are already changing course in their quest for deals.

Lawrence Kwon, managing director for Moelis & Company, put it into context during the “Wall Street Outlook” panel: “For the last couple of years everyone was hunting the big game. In the last six months, there’s more of a willingness for some of these companies to write smaller checks for things that are strategic fits.”

That quote cuts directly to the core of the approach hotel leaders must take: Have a plan in place but don’t be afraid to veer from that plan if the right opportunity presents itself at the right time. Judging by the session speakers, hallway conversation and discussions over cold libations, I’m quite certain the vast majority of ALIS attendees have already adopted that mantra.

—Jeff Higley, editorial director
@jeffhigley1

The industry has been dancing around the issue of a downturn for the past two years, always worried it was close at hand. This year at ALIS, however, attendees seem comfortable with the idea that moderate revenue per available room growth and overall steady demand growth (some markets notwithstanding) may be the new normal for the time being—and a pretty good one at that.

For the first time in several years, there are no clear “winners” when it comes to the types of companies who will thrive in this operating environment—for once, it seems there’s enough to go around for everyone. Plenty of people are heartened by Marriott’s successful acquisition of Starwood, happy that a move of this scale will have a trickle-down impact on the industry at large, lending it more credibility on the playing field. Still, smaller companies know that if they can’t have scale of that magnitude, they need some USPs to set them apart. I’ve heard lots of talk in the halls and breakout sessions about boutique and lifestyle hotels and how their laser focus on customer desires will carry them through the next phase of the cycle.

—Stephanie Ricca, editor in chief
@HNN_Steph

Perhaps the most interesting thing from a day when everyone seemed to talk about President Trump, except the guy who leads the company bearing his name, was the repeated insistence that hoteliers need a laser focus on viewing travel as an opportunity to provide memorable experiences for guests.

In a panel that focused on boutique and lifestyle hotels, Generator Hostels CEO Fredrik Korallus said his company is the logical extension of that idea, and they’re willing to bet big on that concept.

“The interesting thing with hostels is we’re selling beds, and (for) people living in these shared accommodations, the least important thing about it is the bed,” he said, noting the young travelers who opt for their properties are looking to be out in the world as much as possible.

—Sean McCracken, news editor
@HNN_Sean

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