The first Americas LodgingSummit at LA Live started Monday under dark clouds and heavy rain — at least by Los Angeles standards — but by the end of the event, the sun was shining outside the JW Marriott and inside the mood was just as bright.
The forecasts and outlooks for the year from most speakers were positive, as were conversations I had and overheard with other attendees. There were no major “business-as-usual” optimism and the belief things were getting back to normal.announcements, no new brands — a staple at past summits during the heyday — but the conference was definitely not as dire as the last few. The cautious optimism of the past seemed to be replaced by
Yes, concerns over macroeconomic issues like the European debt crisis and the upcoming presidential elections here weren't forgotten, nor were questions about the availability of credit and the mountingmaturities coming due this year and next.
But there were lenders on and off stage talking about lending to hotels: from the most prominent, Wells Fargo's Greg Wolkom (“it's a good time to get back into it, there's not a lot of senior lenders out there”; to Raphael Fishbach, a principal at Mesa West Capital and one of the few underwriting for transitional and deeper turnaround opportunities with a good story, more risk and more reward; and Jackson Hsieh of UBS, whose firm is in the process of securitizing $300 million in loans already this year; and Jon Wright of Access Point Financial, who is the rare breed providing PIP and FF&E financing.
Sure, the amounts available and costs aren't what they used to be, and you have to be a strong borrower and/or willing to offer a guarantee, but maybe that isn't the worst thing.lending is still nearly impossible to find, but the upside to that is supply will continue to be at historic lows allowing the operating side of the industry to continue its recovery.
Some other reflections and scribbles in my ALIS notebooks…
• The venue was excellent, spacious, comfortable and well serviced by the Marriott employees. Early on, there seemed to be discontent among some attendees about getting to and from the various areas inside the JW Marriott and over to the Nokia Theatre for the general sessions and keynote addresses (Trump, Zell & Marriott). Large curtains and tight security kept those who didn't have a badge from entering the hotel, which caught a few off guard and drew some negative reactions, but ultimately made networking among actual attendees much easier. Virtually every exec I spoke to, from some of Marriott's biggest competitors, said they liked the venue.
LA Live provided plenty of quality food & beverage options to satisfy the 2,400 attendees, but if you did want to adventure outside of the massive complex, you needed a cab and directions. The event in San Diego the last couple years was ideal in that you could easily walk from the Hilton Bayfront to the Gaslamp Quarter and a plethora of entertainment and eating options.
• Beyond the general outlook of the industry, the other main topics of conversation at ALIS were digital distribution and the big brands' launch of Room Key, a hotel search engine clearly targeting the higher-priced OTAs. Every brand exec I spoke to — including several from non-Room Key participants so far — was enthused about its launch and interested in joining. Operators and asset managers surveyed also were intrigued with its potential.
On Tuesday, the “Distribution Channel Analysis: a Guide for Hotels” was released by the Hospitality Sales & Marketing Association International (HSMAI) Foundation. Although brand.com sites grabbed the lion's share of bookings (16.4% of demand and 18.5% of revenue), OTAs grew to 11% demand and 7.7% of revenue. The report suggested owners and managers needed to focus on shifting demand share and focus on profit management, not revenue management. (Read the February issue of Lodging Hospitality for more on the study and Room Key.)