Lodging Executives At HOTEL BUSINESS® Forum Assess What Waits In The Wings For The Industry

NEW YORK— “Nobody [in the hotel industry]was right about what would happen in 2001…even before the events of 9/11.” So said FelCor Lodging Trust’s Tom Corcoran, who— addressing a conference-roomful of leading industry executives during the course of a by-invitation-only HOTEL BUSINESS® Executive Forum today— openly questioned the hotel industry’s ability to accurately see ahead…even if it’s just into the near-term future. Convened as the second in a continuing series of top-level gatherings of lodging-arena professionals, the midday meeting covered such a diverse array of topics as: the viability and timing of a widespread industry recovery; stock-market machinations and their impact on the industry; general supply-and-demand concerns and their corresponding effect on hotel profitability; the state of today’s deal-making marketplace; and the definition of what might well constitute “the new normalcy.” While Corcoran was busy delivering a few well-chosen disparaging words about the way 2001 seemed to “sneak up” on this country’s hoteliers and analysts alike, others in his discussion group similarly offered up negative tidings about what the remainder of 2002 holds in store. To this end, the consensus was: “Don’t expect any substantial recovery until 2003…at the earliest.” Among the other industry executives on-hand to contribute their input and insight were: iStar Financial’s Dan Abrams; Gemstone Resorts’ Mark van Hartesvelt; Tishman’s Tim Haskin; Anne Lloyd-Jones of HVS; Insignia Partners’ Tom McConnell; CNL Hospitality’s Charlie Muller; Winston Hotels’ Jim Rosenberg; Jeff Saunders of Saunders Hotel Group; The Hersha Group’s Neil Shah; InTown Suites’ David Vickers; the Proccacianti Group’s Greg Vickowski; and Ken Wilson of Capital Hotel Management. Other particularly astute observations to surface during the two-hour forum moderated by New York University Dean Lalia Rach included: widespread agreement that there’s just too much “travail” in travel today; the thinking that revised and realistic expectations are in order for pricing, occupancy, profitability, etc.; acknowledgement of the apparent dearth of distress-motivated deal-making; and the appreciation that market (and lending) conditions are significantly different— and more difficult— for development deals as opposed to property purchases. Finally, in as fitting a summation of the current state of the industry any of the participants offered, van Hartesvelt noted: “Getting the occupancy without getting the rate is just about the worst thing that could happen.” As he explained, accommodating guests still means elevated levels of staffing and service— line items that drive up the day-to-cost of owning/running a hotel. (Full coverage of today’s conclave will appear in the Sept. 7 issue of HOTEL BUSINESS®.)