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Anticipation, Perception, and Reality
6/7/2012 | Hotel Ruminating |
If hoteliers and developers where playing the survival game a few years ago and the waiting game last year, this year, there seems to be a sense of anticipation as to when money will start flowing and deals will start happening in earnest. For the last four or five industry investment conferences I attended as a member of the press, I, like many of my colleagues, found myself struggling to scrounge up news to report. As we all know, lending was tight to non-existent, and only recently has optimism begun to creep back into the agenda of these various conferences.
As signs of economic recovery continue to get better and then seem to take a step back, only to step forward again, I went to this week’s NYU International Hospitality Investment Conference, hopeful that we’d come across some exciting news on the deal front, mainly because at January’s Americas Lodging Investment Summit, many people were expressing the opinion that we’d start seeing inventory become available by the NYU show.
The anticipation grew even further in the weeks leading up to the conference when big deals broke on the brand front. First there was Blackstone’s purchase of the Motel 6 and Studio 6 chains from Accor; and then there was Marriott International’s deal to acquire the Gaylord brand and its management company. So, while I didn’t expect any more big news of that level during my time in New York City, there was optimism aplenty. Action? Not so much.
There were nuggets to be sure: The B Hotels Resort brand announced its third property at Walt Disney World and Driftwood Hospitality filled me in on its expansion plans (both of those stories can be found in the news archive of this website).
But for the most part the talk of the conference was optimism over the rise in demand and rates, as well as a seemingly more confident traveling public. But, perceptions are running both ways. At NYU, there was discussion of an up and down stock market, the European debt crisis, China’s slowing economy, and weak employment figures. While all of those don’t necessarily contribute to the public’s ability or want to travel, some of the CEOs on hand pointed out that that consumer confidence is often a function of perception and not logic.
As news outlets hammer away at these issues, many consumers, even if they do not understand the issues or even they have a stake in them, may come up with the perception that things are still bad and continue to play the waiting game before spending.
But that didn’t damper anyone’s spirit during the three days at the Marriott Marquis in Times Square. Optimism still rules the day in the hotel industry, and for many reasons—as stated earlier, demand for travel is up, supply is steady, and hoteliers are continuing to re-gain more control over their pricing power. And to be sure, while deals aren’t happening at a fast clip, they are starting to emerge. As one CEO put it, and I paraphrase, thinking there hasn’t been any action this year is to forget what it was like in 2009.
So with each quarter, more action begins to take place. We’ll all keep anticipating the deals that are inevitably going to come.
READER COMMENTS
Monday, June 10, 2013 by free bookmarks
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Friday, June 08, 2012 by allenpitt
But most of the times decision making of deals seems very hard. As it deals with the business we can't take risk.
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