When attendees of the Americas Lodging Investment Summit gathered in Los Angeles on Monday morning, it rained. The gray skies served as an omen for the following two-and-a-half days of conversations since wherever I turned, dark clouds on the operational horizon permeated the discussions.

Conversations — masked, of course — normally started with a cursory acknowledgment that leisure travelers are back, and back in force, so that hotels in beach and leisure destinations are now able to comfortably charge higher rates than they did in 2019.

But those comments were immediately followed up with the grim reality that the lack of group and business travel is hurting downtown hotels of all sizes. And the rooms that can be sold sometimes stand dirty for a while until the skeleton housekeeping staff can attend to them after check-out. Forget daily housekeeping service. And don’t be surprised if it’s the general manager who is cleaning the rooms.

In addition to talking about labor troubles, every single conversation focused on vaccine hesitancy and the rapid spread of the Delta variant, which was illuminating and a little scary. Conference organizer Jeff Higley told us that 1,800 attendees paid, but the attendance in the general session was much poorer. Gone are the days of 2,000 of our colleagues packing the Microsoft theatre. I felt bad for the CEOs of the largest publicly traded companies presenting their insights to what felt like a few hundred listeners. The mask mandate that went into effect, plus the high Delta transmission rate, likely caused some last-minute no-shows. But if we travel professionals are not meeting, I am now decidedly more bearish on the fall and the return of corporate group demand.

It was interesting to see Higley open the 20th ALIS conference with an image of an editorial he had written for the first ALIS conference, back in his Hotel & Motel Management magazine days, with the word “uncertainty” dominating the headline. My, my, how times have not changed.

When cocktail reception attendees asked me about the outlook for the fourth quarter, I normally just returned the question with: “Really hard to tell, what are you seeing?” One answer I got from a large owner was that he is in constant touch with travel managers of his large accounts and, in his words: “They have no idea about the fall, so how could I?” Not sure that made me feel better, but at least the uncertainty is uniform.

There is, however, no uncertainty on the money front. Debt and equity capital abound, or in the words of the always direct Homi Vazifdar, managing director of Canyon Equity LLC: “There are a lot of stupid people who are paying crazy money.”

He mentioned that multiple Aman resorts around the world are now for sale at $6 million per key — yes, you read that right. But after the collective exhale from the audience, he admitted that none of them had sold at that price.

Robert Hee, chief operating officer at Canyon Equity LLC, in a separate conversation about the current attractiveness of tented accommodations mused about the Camp Sarika at Amangiri in Utah: “Our guests are paying $4,300 a night — don’t call that glamping.”

Leisure exposure drives results, and with many assets buyers and sellers seem to agree that 2019 net operating income is once again the standard metric to base values on.

However, actualizing results similar to 2019 is quite a few years away, and Amanda Hite, president of STR, a CoStar Group company, cautioned attendees that nominal average daily rate and revenue per available room will reach 2019 levels in 2024, but that in inflation-adjusted, or real, terms those results will not be realized for quite a while thereafter. Depending on the hotel, profitability will also take a while to return.

Then there was Rob Palleschi, CEO of G6 Hospitality, who cheerfully shared that his hotels are already profitable.

My takeaways from ALIS 2021 are this:

• The rapid spread of the current Delta variant will be the deciding influence on corporate travelers through next spring, and I am afraid we already missed the chance for a stronger recovery this fall.
• Bottom-line results will be affected by increases in hourly wages and training costs.
• Amidst all the uncertainty, there are some great examples of innovative thinking.

My favorite example of innovative thinking came from the CEO of a large management company, which allows its night auditors and accountants to bring their pets to work. Turnover rate in this notoriously hard-to-staff job has been reduced to 0%. And he is now fielding inbound calls from other night auditors who want to switch to his properties.

I look forward to seeing how September and October performance results shape up and to discussing vaccination and RevPAR trends at the NYU International Hospitality Industry Investment Conference in New York in November.

Jan Freitag is the senior vice president of lodging insights at STR and national director for hospitality market analytics at CoStar.

The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concern.