NEW YORK — First Hospitality President and CEO David Duncan sees a lot to be excited about in hotel operations right now. The deals landscape, however, is considerably less positive.
Speaking with Hotel News Now at the 2023 NYU International Hospitality Industry Investment Conference, Duncan described the broad industry landscape as a "tale of two cities."
"So I think it's really interesting when I talk to people, depending on what part of the business they're in, the [general managers] think things are going pretty well; the acquisitions teams, it's hard to motivate them. They can be in a funk," he said.
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Duncan said his business gets a little bit of everything across the hotel industry as an operator, owner and active developer. He said controlling costs on construction projects is a "monumental task."
"We're seeing construction overruns in a lot of different places, so even if you're able to get something funded, financed and begin to build, controlling costs is still a real issue as a result of the pandemic and the cost inflation issues," he said.
The positive spin on the construction difficulties for the moment once again tie into operational metrics.
"So in the long term, I think we're going to benefit from really low-supply additions over the next three to five years, which is a nice thing ... if you're already in an asset," Duncan said. "I think it provides a little bit of a tailwind."
For more from HNN's interview with First Hospitality's David Duncan, listen to the recording above.