Posted 8/7/2009 - 12:32:22 PM
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What are these?
DORAL, FL—The 350 attendees at last month’s 13th annual meeting of the National Association of Black Hotel Owners, Operators and Developers in this Miami suburb had one overriding concern in common: that the current economic recession not slow the recent strides made by the African-American community in the lodging industry. In fact, the message, starting with NABHOOD President and CEO Andy Ingraham’s opening remarks and communicated throughout the conference, was that despite difficulties obtaining financing and the significant recession-related drop in travel demand, there was cause for optimism. Opportunity, Ingraham argued, still existed for both established African-American owners and developers and those seeking to enter the industry for the first time.
“Building relationships within the industry is more important than ever today. Especially when times are tough, you want people standing with you who you’ve worked with before and trust,” Ingraham said.
Ingraham’s outreach extends beyond fellow owners and developers to vendors and suppliers within the African-American community. “The emphasis is—and should be—on deal making. Everyone here is looking for a partner. And we see NABHOOD as the facilitator,” he added.
Leveling the playing field
The deep recession has created an opportunity for African-Americans to level the playing field that didn’t exist before, noted NABHOOD’s chairman, Michael Roberts, who is also chairman of the Roberts Hotels Group, LLC. “We’re not about to let the bad economy enslave our minds, nor let the banks dictate our future. We’re ready to do business with those who do business with us. There’s no better time to begin the process of acquiring and developing hotels,” he said.
“It’s about green power today,” Roberts continued, citing the positive effect that Federal stimulus money could have on development. “We should each be thinking how to apply that to our business. It’s certainly going to have an impact on urban development.”
To suggest the potential power that African-American ownership groups can have on the industry, White Lodging Services’ Deno Yiankes recounted White Lodging’s $1.7-billion sale of 100 hotels to RLJ Development in 2006, which made RLJ the largest African-American owner in the country. “From the start of our discussions, we felt there was an alignment of our interests and theirs. There was a lot of mutual respect for the two companies as well as on an individual basis,” recalled Yiankes, who is president and CEO of White Lodging’s investments and development division.
Following the acquisition by RLJ, White Lodging remained on board to manage the portfolio. Yiankes described RLJ as “a smart and aggressive asset manager that knows how to let its operator operate.”
Yiankes advised NABHOOD members interested in acquiring their first lodging properties to not try to time the market. “RevPAR isn’t likely to come back for six to seven years to where it was a few years ago,” he explained. “But there is money to be made over the long term. By 2012, 2013 and 2014, you’ll be seeing significant value creation.”
For those looking to sell assets in the current market, Yiankes took the same long-term view. “If you don’t have to sell in the next 12-18 months, don’t,” he recommended. “Hold on. All you’ll get today is liquidation value.”
In building NABHOOD, Roberts, Ingraham and the organization’s board has sought to emulate the success of the Asian American Hotel Owners Association. “Fifteen years ago, AAHOA had no clout,” Ingraham noted. “But today its members have become a major force in the industry, owning 20,000 hotels in the U.S. worth an estimated $40 billion and employing over one million people.”
In the past few years, the AAHOA-NABHOOD connection has grown stronger. “It’s become an important partnership for us,” said AAHOA’s chairman, Tarun Patel, at an AAHOA town hall session held during the NABHOOD meeting. “There are many industry issues, including political issues, where we have a shared interest. There’s strength in numbers, so it makes sense for us to work together, especially on Capitol Hill, where the Congressional Black Caucus is very influential.”
Political influence was also on the mind of conference speaker Sheila Johnson, CEO of Salamander Hospitality, LLC, which owns the Innisbrook Resort & Golf Club in Innisbrook, FL, among other assets. Like other owners whose properties book corporate meetings, Johnson saw that business drop precipitously this year following criticism by Washington officials of spending by companies on off-site meetings. “We have to let the Obama Administration and our elected representatives know how damaging these comments have been,” Johnson said, “and that the meetings business is part of the solution to the country’s economic troubles, not the cause.”
