The most recent NYU Conference, earlier this month proved, once and for all, that the lodging industry has finally turned the corner and happy days are, indeed, here again. While the economists and pundits all provided plenty of anecdotal evidence to bear that out in terms of supply and demand ratios, RevPAR projections, asset values and all the other metrics, that’s not what has me convinced.
With the exception of those on stage, this was the first time in a long time that the conversations at cocktail parties weren’t consumed with talk of the economy and industry performance.
In fact, the talk of the conference was that the New York Hilton Midtown, the city’s largest hotel with 2,000 guestrooms, wasn’t serving room service anymore. That seemed to be all anyone wanted to talk about during the first day of the event. (Incidentally, Hilton officials maintain this decision is unique to this property and doesn’t represent a brandwide initiative.) There was also Marriott’s event to celebrate the launch of its AC Hotels brand for the millennial market.
The truth is it’s been a while since there’s been any actual hotel news at a major industry conference. It wasn’t Hilton buys Marriott, but it’s a start. Acquisition activity has picked up in recent months, financing has become more readily available and even new-construction activity has started to inch up. All of these are positive indicators for the lodging industry going forward.
There are issues to be sure—sequestration, health care reform, a tenuous global economy—but much of the doubt and uncertainty following the industry seems to have dissipated. Nearly everyone I spoke with at the conference was all smiles when I asked them about how their business was faring.
For the first time in a while, everyone seems content with current conditions, rather than looking down the road two or three years. Are we back to pre-2008 levels? Probably not in most cases, but we’re getting close, and those numbers were a little out of whack. However, more than one executive said to me we may look back a few years down the road on this period as a “special time” in the industry, similar to how we look at those pre-2008 days.
If that’s true, my advice is to enjoy it. Of course, continue to be diligent about saving money and running your business as efficiently as possible; it would be foolish and short-sighted not to. But also invest in it with the knowledge that conditions may be good for a while and you’ll likely see a return on that investment.
Often times, over the past few years at the many industry events, hotel executives would ask me what I see. There was very little of that at this event, and that could mean one of two things: my opinion is no longer valued or relevant, or they know what they are seeing and there’s no reason to ask. For a number of reasons, I’m going with the latter.