Post by Bill DeForrest
The Americas Lodging Investment Summit opened Monday in San Diego. The skies were sparkling blue and cloudless, but the forecast for our industry, according to the opening panel, remains partly cloudy.
The panel of experts was optimistic that our industry was on an upward trajectory. But there were a number of variables that keep the clouds in our forecast for the near future. The housing market, the unemployment rate, possible inflation—each of these factors made the opening panelists a bit uncomfortable. Why? Because they were variables beyond our control, variables that still exert influence on your hotels.
They did point out one factor that is within our control and that seems to be lagging behind other recovery indicators—rate. Demand is increasing, occupancy is rising, but rate continues to lag. Are we being too cautious in our rate management? Are we missing an opportunity to generate more revenue because we are tentative? I can’t answer that question for anyone else’s properties, but it has made me ask: can we be more aggressive with rates—should we be?