More than 1,800 hoteliers and hospitality professionals from around the country converged on The Arizona Biltmore this week for the 23rd annual Lodging Conference. Optimism is running high at the conference, despite the expectation that the hotel industry is nearing the end of the cycle.
On Tuesday, Oct. 31, the conference’s Co-Founder and Producer Harry Javer described the myriad of reasons why industry professionals remain optimistic, from increasing global travel to rising investor profits, while also highlighting the challenges the industry expects to face: oversupply, higher construction and operating costs, property taxes and stymied tax reform, and the growing threat of cyber security, terrorism, and natural disasters.
Despite these difficulties, an economic outlook of the industry by Bernard Baumohl, chief global economist at The Economic Outlook Group, LLC, showed that in the next two years, the economy will most likely continue on its course of modest growth from 2.5 to 3 percent by 2019, with the caveat that the Federal Reserve does not significantly increase the rate at which it is raising interest rates. JP Ford, SVP of Lodging Econometrics, presented projections that room growth rate will increase 2.5 percent in both 2018 and 2019. Most new construction remains in the upper midscale, upscale, upper upscale, and upper midscale segments, and the biggest markets are New York City, Houston, Dallas, Nashville, and Los Angeles, although secondary markets are expected to be hotbeds for development next year. Ali Hoyt, senior director of consulting and analytics of STR, said that hoteliers should expect demand to continue outpacing supply, leading to continued modest RevPAR growth for 2018.
Hilton CEO Christopher Nassetta said that the company is working on new brand concepts and may introduce them as soon as next year. During Hilton’s third-quarter earnings call, Nassetta said that a “Hilton Plus” brand, a luxury soft brand, and an urban, micro-room brand are in the works, and two or three of the projects may launch in 2018. Hilton is also considering a luxury lifestyle brand, Nassetta said, but that concept is not as fleshed out as the other three. The news comes after IHG revealed that it’s looking into developing a new soft brand and a luxury brand. Read more about Hilton’s plans here.
HREC Investment Advisors has retained lodging real estate veteran Shane Skubis as senior vice president, expanding its brokerage platform. He spent 25 years delivering hospitality deals to clients and, in total, has sold, developed, franchised, and/or financed or found the land for approximately 260 hotels across the country.
For a look at other notable comings and goings that took place this week, click here.
According to travel professionals, the numerous natural and man-made disasters of the last couple of months—the hurricanes that battered Texas, Florida, and Puerto Rico, the earthquakes in Mexico, and the mass shooting in Las Vegas—all had a major impact on hotel bookings in the affected areas. However, the downturns experienced in these areas were typically short-lived. The experts found that immediately following the events, bookings typically plummeted, but as soon as another event grabbed national headlines, the bookings tended to rebound. Read more here.
Earlier this week, a drone video posted to YouTube showed the extent of destruction caused by a wildfire in Santa Rosa, Calif. The footage reveals extensive devastation to homes and businesses in the state’s wine country, including to the Hilton Sonoma and Fountaingrove hotels. Guests at area hotels had been evacuated as hoteliers were forced to shutter their doors. The wildfires continue to rage through the state and have left 31 people confirmed dead and hundreds missing. Read more here.
A new study by the Global Business Travel Association finds that the majority of business travelers are irritated during their journey towards their final destination. According to the study, the crux of that frustration is the amount of time that travelers feel is wasted and not productive. Read more about the study results here.