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HB ON THE SCENE: Lodging Conference Highlights Disconnect Between Industry and Overall Economy

Thursday October 4th, 2012 - 5:46AM


Eric Danziger (left) and Jim Abrahamson

PHOENIX—Speakers on the first day of the 18th Annual Lodging Conference here pointed out the difference between rebounding hotel industry fundamentals and the overall U.S. economy, which remains sluggish.

According to Vail Brown, Smith Travel Research VP of global business development and marketing, for the first eight months of 2012, the industry's performance has been very strong with ADR growing at a faster pace than occupancy. Demand has outpaced supply growth for the past 25 months, Brown added.

Looking forward to the next 12 months, Tim Hart, EVP for business intelligence at TravelClick, told the 1,400 conference attendees gathered at the Arizona Biltmore Hotel that nationally business on the books for the period is up 4%, compared to the same point last year.

Panelists on the first day View from the Top session expressed optimism as well. However, they cautioned that the world economy, starting with the fiscal cliff coming in the U.S. at the end of the year plus persistently high unemployment here and then the debt crisis confronting a number of European countries plus hot spots in the Middle East such as Iran create significant uncertainty for the industry going forward.

Panelist Eric Danziger, president & CEO of the Wyndham Hotel Group, noted that hotel companies always need to have contingency plans ready, affecting marketing, operations as well as development, should financial results deteriorate sharply due to unforeseen circumstances. Similarly, they need contingency plans for expedited growth, should the fundamentals continue to improve at an even more accelerated pace than forecast.

Looking to the future, panelist Jim Abrahamson, CEO of Interstate Hotels & Resorts, noted that the industry needed to start focusing more on Gen X and Gen Y travelers, who are going to be the next generation of travelers. The industry, in effect, needs to reinvent the hotel experience, if it's going to meet the expectations and preferences of this emerging group of consumers, he said.