Black swans, they are a comin’—every year since 2012
Black swans, they are a comin’—every year since 2012
15 JUNE 2020 7:37 AM

We may describe COVID-19 as the ultimate black swan … that is, until the next one comes along. Let’s have a look at a year-by-year breakdown of those sage prognostications of apocalyptic catastrophes.

At last week’s virtual Hotel Optimization conference, Tim Helliwell, head of hotels, Barclay Bank made a comment that cut to the quick.

“At every conference, there is always someone who says the industry is fine unless there occurs a black swan, and to that comment everyone nods,” he said.

He did add that guests, and hoteliers perhaps, do have short memories and on the industry goes again. Let’s hope that is the way, and that we have all learnt something from the great financial crash and will from the coronavirus epoch.

My colleague Sean McCracken has stated COVID-19 is black swan to end all black swans, but maybe history has taught us never to say never. (Maybe I should also add that the phrase “black swan” comes from British travelers returning from Western Australia with tales of a swan that was black, not white as they are in Europe. With only two parts to its Latin name, the black swan (Cygnus atratus) is thus defined as being separate to all other species under the Linnaean zoological classification system.)

Another aside: Birding is the one thing I miss most during lockdown. Yes, I can look out my window, but it is not the same as going to recognized reserves. To partially make up for this I have a daily Bird of the Day column and photo within the STR Microsoft Teams chat pages, some 60 or so of my bird photos, with comments.

Anyway, back to the main thrust of this topic: I will assume hoteliers have listened to black-swan comments at conferences and then scurried back to their boards to instigate a 360-degree All Hands plan to offset them, but here goes with some of the conferences Hotel News Now has covered where black swans and their numerous cygnets have paddled across whole lakes of panels, breakouts and cocktail receptions:

First, here’s one from a former HNN columnist Joel Ross, who wrote a blog in 2016 titled “Brexit: The grandfather of all black swans.”

Oh, my giddy aunt, how twee and glib that sounds right now.

From 2012—“The issue is that if you really want to focus on reality and identify all the black swans out there, it’s hard to sleep at night. There are no more black swans now than there ever were—we’re just more connected now,” Said Bruce Blum, president and co-founder of GB Lodging during that year’s Lifestyle/Boutique Hotel Development Conference.

From 2013—“The 5-year window … outlined puts us into 2018, which would make this cycle about seven years long in the U.S.—that’s about as good as anyone should expect during this age of black swans and unpredictable economic and geopolitical climates,” wrote our former Editorial Director Jeff Higley.

From 2014—I covered the World Travel Market in November 2014 in London, where Russell Kett, chairman of HVS, “wondered aloud why spectators always look for the next macroeconomic black swan whenever the hotel industry is doing well. … a list of the possible harbingers of doom, including interest-rate increases, high bid-to-ask and loan-to-value ratios, overzealous valuations egged on by owners and tetchy investors previously unable to place capital and now deciding to move it elsewhere,” I wrote.

From 2015—“When doing projections, do your own, not what appraisers (think),” Joel Ross, then principal at Citadel Realty Advisors, said at The Lodging Conference in October. “Stress-test it, anticipate RevPAR down 10% … see the capital structure and make sure it can withstand a black swan event.”

From 2016—“I don’t prescribe to the falling-off-the-steep-cliff theory for this cycle (insert obligatory “unless there’s a black swan event” here),” wrote Higley in October 2016. “But the end of the cycle, which for purposes of this article is defined as revenue-per-available-room growth, is coming.”

From 2017—Cycles are ended by large, economy-shaking events, commonly referred to as a “black swans,” said RobertDouglas principal Stephen O’Connor at a Hospitality Asset Managers Association, rather than by any perceived time limit. “There’s no greater likelihood for (a black swan event) tomorrow than in a year or two or three,” he said.

From 2018—“Hotels are moving away from the hotels of the City of Ford to the hotels of the City of Facebook. … We have moved away from an age of Black Swans to a world of Black Elephants,” said Leo Johnson, radio presenter, partner at PwC UK and brother of UK Prime Minister Boris Johnson, at the Annual Hotel Conference in October.

Plan for but don’t sweat the things we cannot control, I guess, and no one can really foresee and plan to know the fastest way out of a crisis like this one. But I am pretty sure we will not mention the phrase “black swan” in quite the same way ever again.

And I have also noticed as I looked into our archive that most of these comments were made in the last quarter of those years, which is an interesting thought as today marks the very first day of the second quarter of lockdown, at least here in the U.K.

Email Terence Baker or find him on Twitter.

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