ATLANTA — Executives speaking during the first day of the Hunter Hotel Investment Conference offered reassurance amid worries over global conflict, inflation and an ongoing pandemic.
Whether concerns that higher gas prices could deter leisure travelers from taking a road trip this summer or that another wave of COVID-19 could wreak havoc on certain hotel segments, the overall theme was that the worst is behind us.
Adam Sacks, president of Tourism Economics, told attendees that regardless of fuel prices increasing, people will still consume the same amount of gas as they typically would it and will not change travel patterns.
Overall, domestic leisure travel will continue to the win the day, he said.
Photo of the Day
Quotes of the Day
“I’ve been through a few [recessions], in 2001 and 2008-09. This is what’s different about this one: The last two were absolutely economic crises — especially the Great Recession. This is a medical crisis. This has disproportionately impacted our industry.”
— Mitch Patel, president and CEO, Vision Hospitality Group
“The Great Resignation has hurt the hotel and service industries far more than anyone is talking about.”
—Suril Shah, CEO and managing partner, Riller Capital, about industry headwinds on the “Wall Street Talks” panel.
Editors’ Takeaways
The first day of the Hunter Conference kicked off with an exciting merger announcement between the American Hotel & Lodging Association and Castell Project, in which the two will pool their resources to form "Castell, an AHLA Foundation Project" and continue efforts of advancing women in hospitality. In addition, attendees are having conversations about the next generation of hoteliers, indicating that the hotel industry is paving a way forward to evolve the talent pipeline more than it ever has before.
However, hotel CEOs speaking on the "C-Suite Conversations" general session acknowledged that the hotel industry is up against big-box retailers for talent, and the hotel industry has historically underpaid its workers.
"We need to compensate competitively," said Wyndham Hotels & Resorts President and CEO Geoff Ballotti.
— Dana Miller, senior reporter
@HNN_Dana
Despite headwinds such as fuel prices, inflation and the effects of Russia’s war in Ukraine, hotel industry optimism is on a roll — for now, at least. There’s so much interest in hotel deals, and the sweet spot continues to be select-service hotels and extended-stay hotels. Investors are chasing margins. They know what they’re dealing with to some extent with labor costs and other variable costs in the hotel, but they’re itching to spend all that pent-up capital, so more deals are happening.
Leisure demand is still very high and this summer in the U.S. is anticipated to be just as hot, conference speakers said. But for the first time this year, I heard optimism about the return of business-transient travel.
“Business travel has come back really quickly in the last couple months and it bodes well for where rates are heading in that sector,” said Tyler Henritze, head of strategic investments for Blackstone Real Estate Americas, on the “Wall Street Talks” panel. “Sun Belt markets that are business-friendly? If you can buy there, you’ll do very well.”
— Stephanie Ricca, editorial director
@HNN_Steph
Extended-stay brands have been a popular topic in the industry as Choice Hotels International rebranded its Suburban Extended-Stay Hotel brand last week and Wyndham Hotels & Resorts announced its foray into the economy scale of the segment Tuesday morning with its “Project ECHO.”
The success of the extended-stay segment has been evident, especially during the pandemic, and hotel executives seem convinced that the business model is sustainable post-pandemic.
Baywood Hotels President Al Patel said on the “Main Street Talks” panel that even with extended-stay hotels making up 40% of the company’s portfolio, he wants that number to continue to grow to 50%. He said 95% of new development in Baywood’s pipeline is devoted to the segment.
Mitch Patel, president and CEO of Vision Hospitality Group, agreed that the extended-stay trend is here to stay and added that he has looked to develop extended-stay opportunities he wouldn’t have in the past.
— Trevor Simpson, associate editor
@HNN_Trevor