ATLANTA — On the second day of the Hunter Hotel Investment Conference, experts presented contrasting thoughts on where the United States economy is, how external factors are affecting the hospitality industry and the disconnect between brands and owners, especially with the potential effects of tariffs, labor shortages and more.
Something everyone seemed to agree on, though, is that the uncertainty and inevitable effects of the current administration’s actions feel familiar. Since 2020, every hospitality player has had to be nimble and quick in their problem solving and business pivots. While the industry isn’t sure how severe this latest edition is, everyone needs to get used to being resilient in light of these black swan events.
Read on for more highlights from Day Two.
Photos of the day
Slide of the day
Quotes of the day
"Don't bet against the U.S.; our economy is incredibly dynamic, and I think that that's something that we as Americans constantly beat ourselves up with, that we're not good enough. We have issues, don't get me wrong, ... political dysfunction and divisiveness, those are real issues, among many others. But we don't have a population problem with or without immigration. By the way, roughly 1% population growth on a year in, year out basis. Europe doesn't have that. Japan doesn't have that." — Michael Skordeles, head of U.S. economics and senior vice president at Truist
“From a construction standpoint, we’re getting ready to get started on our Hampton/Home2 in Nashville. We met with our [general contractor], and this is the conversation we’re having now. Tariffs — we’ve got to account for them, if they are around or not, with the geopolitical environment, it could change next month. We’ve got to make room for it in the budget. … It could go away, and hopefully it does go away, but we have to account for it with financing. Lenders are going to start asking, ‘How are you accounting for tariffs?’ It’s here, and I think we’d better address it, and just deal with it.” — Pete Patel, founder and CEO of Nexera Capital
"I don't think you 'do' authenticity; you either are authentic or you're not." — Mark Hoplamazian, president and CEO of Hyatt Hotels Corp.
Editors' takeaways
The U.S. macroeconomic picture looks a bit different depending on your industry or market exposure. The outlook from Michael Skordeles, head of U.S. economics and senior vice president at Truist, stayed mostly positive. Consumers haven’t yet closed their wallets. Wages are growing just ahead of the rate of inflation, and historically, when consumers have income, they spend it. Credit card debt, while high, is still in the normal environment as the overwhelming majority of card holders aren’t missing their payments.
However, a deeper look at U.S. lodging fundamentals paints a different picture. Jan Freitag, CoStar Group’s national director of hospitality analytics, highlighted how international inbound demand to the U.S. is down 8% since 2019, while outbound international demand — the number of Americans traveling abroad — is up 21% over the same period. The U.S. dollar is strong for now, fueling those American international trips, but for how long? And will negative international sentiment about the U.S. lead to further international inbound demand declines?
Beyond the travel demand impact, President Trump’s hard line on immigration policy could disrupt the labor environment, especially in the hotel industry. Freitag cautioned that any kind of exodus of workers from the hotels business could lead to other industries offering higher-paying jobs to those immigrant workers, which in turn will force hoteliers to raise wages once again to stay competitive.
It's anyone’s guess how all those factors will play out, however. That’s volatility and uncertainty for you.
— Dan Kubacki, senior editor
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Day Two at the Hunter Hotel Investment Conference has continued with more discussion on the tumultuous state of the economy, and the sessions have included a lot of data on the subject, which has conflicted at times in terms of outlook.
Mark Hoplamazian, president and CEO of Hyatt, had an interesting take on the uncertainty. In his fireside chat, he was asked about how he goes about scenario planning around big disruptors like COVID-19. His answer was simple: He doesn’t. It’s more important to him to be running nimble and fast, and a lot of that is driven by the boots on the ground at his hotels.
— Natalie Harms, reporter
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I spent time with brand executives on Day Two, moderating a panel with brands and owners, and speaking with others for interviews. The topic of brand expansion came up a lot, and it's always interesting to hear both perspectives. One common theme: Both brands and owners are doubling down on a commitment to quality. Seems a little incongruous, given the high fixed operating costs and other stresses of ownership right now, but that's not the case, according to the owners I spoke with. They all said brands have put in considerable work since the pandemic in defining brand roles, communicating on updates and providing training and tech. With a persistent low-supply environment right now, it feels like owners are committed to maximizing what they have.
— Stephanie Ricca, editorial director
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