Billions of Dollars On the Sidelines

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One of the main reasons many attendees at last week's Americas Lodging Investment Summit were relatively upbeat is the knowledge that somewhere lurking on the sidelines of the industry are billions of dollars primed to make hotel deals once conditions improve. A scan of the list of ALIS attendees shows few from private equity firms, a segment that seems to be waiting until later this year or 2010 to become active.

The question, of course, is what will trigger this supposed outpouring of funds to acquire properties, portfolios of hotels and even brands and operating companies. First and foremost, it will take a signal from the banking community that it is jumping back into the commercial lending pool. That, in turn, should signal broader improvements in the national economy. Today, everyone--and that includes Wall Street bankers and Main Street waitresses alike--are scared about their jobs and their futures and are taking wait-and-see attitudes on nearly every financial decision, whether it's buying a new car or a five-hotel portfolio.

Unfortunately, there's not a lot any of us can do to help the situation aside from maintaining (and spreading) as much optimism as possible and assuring ourselves and our colleagues that recovery will come--certainly not this month and perhaps not this year--and a sense of normalcy will return. I sure hope I'm right on this one.

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