NASHVILLE, Tenn. — While the industry is still navigating obstacles presented by the pandemic and adjusting to things like fewer distressed assets than expected, hotel chief financial officers are optimistic about the future.

On "The Buck Stops Here: Learnings From the Industry's Top CFOs" panel at the 2021 Hotel Data Conference, Charles Macon, chief financial officer at BRE Hotels & Resorts, said there hasn't been as many distressed assets listed for sale as predicted at the beginning of the pandemic because assets are holding value.

"In the margin, there could be isolated circumstances, but en masse, based on the pace of recovery, the nature of the pandemic ... if you're an owner and you're sitting on a distressed asset and you're in a favorable COVID-driven market like Florida ... the value of your property may be the same or more than it was pre-COVID," he said.

Delinquency rates are going up and some forbearance has shifted, but Wyndham Hotels & Resorts franchisees haven't seen many issues with this as they are borrowing from regional banks, Chief Financial Officer Michele Allen said.

She said Wyndham is seeing loan-to-value ratios come down, which could present "a greater opportunity for a brand to step in and participate in the capital stack to kind of win the deal."

"I think that's something that's going to stick around for a while," she said.

Panelists said the pandemic and changes to capital markets and investment markets have affected the ability of companies to expand their portfolios.

With transaction volumes still down versus historical levels, Allen said it has affected branding opportunities.

"We're also seeing it on the new-construction side a bit where we have supply chain issues, which are just delaying projects," she said. "But new starts are coming down, pipeline additions are coming down, so that will impact ability to grow system size overall. I think the opportunity will be on independent hotels and then brands that can continue to strengthen their value proposition and maybe steal a little bit of share."

Ray Martz, chief financial officer of Pebblebrook Hotel Trust, which owns independent and branded hotels, said his company was on defense in 2020 and focused on maintaining liquidity. Now, looking into 2021 and 2022, the real estate investment trust is looking at the offensive side.

"We're looking at deploying capital, making some investments," he said.

When asked by the audience if there's more opportunity for inorganic growth through mergers and acquisitions, Martz said transactions would be more public-to-private than public-to-public if some of these M&A transactions do happen.

Some of the public transactions that happened a few years ago such as Park Hotels & Resorts' 2019 acquisition of Chesapeake Lodging Trust haven't "done so well for shareholders," he said.

He added that public-to-public transactions create a lot of noise and could cause hesitancy.

One thing the pandemic has taught Pebblebrook is that it's important to be adaptable, Martz said.

He said the REIT has started thinking about its business model differently and is not requiring budgets this year.

"We've stopped our forecasting; we're just forecasting 30 days out," he said. "We want people to think about the new strategy and revenue management and operations going forward, not what it was. We're trying to keep our managers out of getting back to normal because our view is normal is actually back again. The world has changed."

Allen said Wyndham is looking to optimize rate opportunities going through the fall.

"There's an opportunity right now to reset the consumer expectation on what it costs to rent a hotel room for a night and all the things that come along with that experience," she said. "Changing traveler preferences are definitely part of the future, and I think we're going to need to be able to drive the rate to put some of those costs into the hotel to meet their needs in the future."

Macon said it's important to check in with teams to see how everybody is doing.

"Who is burning out? Who is having trouble? There's a lot of personal and professional impacts to something like this, and people in many cases are irreplaceable. You really have to focus there," he said.

He said the industry should also focus on how many indicators are pointing in the right direction.

"There's reason to be really bullish on what's going to happen in our space over the next five years, and I think as an industry we should be leaning into that," he said. "It starts with great conviction. It starts with the teamwork between owner, operator and the brands to make sure we keep this industry protected. We have that walled garden of delivering world-class experience and taking care of our people and process."