ATLANTA — Hotel transactions pace remains mostly inert. Trade wars could threaten international inbound travel demand to the U.S. And now thought leaders in the hotel industry aren't ruling out that a recession could be coming — soon.
Throughout the first day of the Hunter Hotel Investment Conference, recession talk was front and center as executives acknowledged the volatility of President Donald Trump's tariffs and government layoffs. How much of that policy and rhetoric shakes consumer confidence and intent to travel remains to be seen, and all hoteliers can do for now is keep operating business as usual.
Read on for more highlights from Day One.
Photos of the day
Data point of the day
50%
— Half of the hotel general managers in the U.S. today started at entry-level jobs in the industry, according to Rosanna Maietta, president and CEO of AHLA.
Quotes of the day
"They've been illiquid, and that's really been the challenge, and that is where that big private equity plays most frequently in both portfolio and single asset. And I would say that's the hardest thing to get done in the market today. And it's purely a lack of conviction amongst that private equity class, that mixed-allocation private equity." — Daniel Peek, president, JLL Hotels & Hospitality Group, on how full-service hotels are not trading in the U.S. due to high renovation costs.
"If you go through the periods of time in our careers where the best deals were made, it's when the markets are highly inefficient. You get a much higher multiple, but you're also taking a considerable amount of risk because of the noise. That's why, again, I just stick with the facts as you know them today and understand the way markets work. Markets, essentially, will balance back to the fundamentals, right? And I think the fundamentals are wildly favored to increasing that asset value." — Bob Webster, vice chairman, CBRE
"The business is getting more fragmented. ... We're going in the slope of fragmentation, the managers are asset-light and there's credit cards that are very lucrative, probably more profitable than managing hotels. Soon, we'll have the brand loyalty, we'll have the brand, we'll have the manager, we'll have the real estate. We're getting away from the hospitality business. What I would like to see hotels do is focus on the craft." — Shai Zelering, managing partner, real estate, Brookfield
Editors' takeaways
Hotel owners and their industry takes are the centerpiece of the Hunter Hotel Investment Conference, and they feel just as uncertain as the rest of us. Gone already are the hopes that 2025 would be the return of a halcyon transactions environment; instead, sights are firmly set on 2026 and beyond. Hey, that's just how the industry works when financing conditions aren't the most favorable.
Still, despite the widespread uncertainty and chaos surrounding the new Trump administration, industry executives speaking on the Hunter stage said business must go on. Bob Webster, vice chairman of CBRE, gave a great analogy: "You have to redirect people back to the norm" of more normalized interest rates, he said. "We were on a 15-year sugar high. On a sugar high two things happen: You’re excited and you're fat. So now we're on a low-carb diet, and we’re going back to where we all started."
— Stephanie Ricca, editorial director
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It's been refreshing to hear some real talk at this year's Hunter Conference of concerns that hoteliers have about the next 12 months. On stage, executives have traded "cautious optimism" for realism about the possibility of a recession in the near term. Volatility and uncertainty are the buzzwords as the economy moves further away from pulling off a soft landing and closer to a recession.
There's also been a lot of interesting discussion about how hotel investment might shape up in the year ahead. After an explosion of deals activity in 2021 and 2022, the U.S. hotel transaction market has slowed to a crawl the past two years. But despite market volatility from myriad geopolitical issues, hotel investors enter this business knowing that every investment decision comes with some degree of risk. Now it's time to weigh how much risk they're comfortable with as the true value of the reward won't be known for years to come.
— Dan Kubacki, senior editor
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Coming into the Hunter Conference, I knew to look out for elusiveness and platitudes surrounding the current economic conditions, but I was pleased to see a lot of the panelists address these topics — such as a looming trade war and a potential recession — head on. Unfortunately, while we wanted to hear more certainty from business leaders on what to expect, there is still just so much to be determined.
One thing for sure is that things are going to get worse before they get better, with lenders tightening the purse strings and renovation projects, which already on the expensive side, will continue to rise in cost. Mitch Patel, founder and CEO of Vision Hospitality Group, told the audience in the opening session that storms come and go and businesses need to figure out whether they have a brick house that can weather the storm ahead or if they have a straw house that's about to crumble.
— Natalie Harms, reporter
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