Just like the rest of America, theindustry is waiting for the next shoe to drop, while hoping it doesn't happen. That's the buzz at this year's jam-packed Lodging Conference, which concludes on Friday morning at the Arizona Biltmore in Phoenix.
Speaker after speaker for the past couple of days have talked about the dichotomy in today's hotel industry: continuously improving lodging fundamentals seemingly in contradiction to the upheaval in the U.S. and world economies. It didn't help anyone's confidence that the U.S. stock market took such a momentous tumble in the past two days.
First the good: Vail Brown of STR told the opening-day audience that the hotel industry sold more rooms in the past six months than in any other comparable period in history. PKF's Mark Woodworth followed with news that 44 of the 50 markets he follows are tracking above their previous peaks in demand. At the same time, others talked about the recent 25-percent drop in lodging stocks and the danger of slowing growth in the economy and its effect on hotel demand, pricing power and ultimately profits and values.
Yet, most hotel executives have seen this movie before and are making sure they're ready for what's ahead. Jim Kauffman, COO for Marriott's western Americas region, said it best: “It's time to play offense. Get all the sales engines working and be sure your GMs and area VPs are ready in case conditions change quickly.”
That's the proper attitude to take. Everyone needs to pay attention to the macroeconomic factors at play here and abroad, but it's still most important to pay attention to the basics of the business. Appreciate the upturn but don't take it for granted. As one hotel company executive told me, “The world sucks, but we suck less.” It's not the time to talk ourselves out of a recovery.