Some people call him a cynic or even a downer, but Laurence Geller actually believes good times are ahead for the hotel industry. “The problem is I don't know when they'll be here," the president and CEO of Strategic Hotels & Resorts told a luncheon audience at this week's Midwest Lodging Investors Summit in Chicago.
"If you believe as I do that this is a cyclical economy and a cyclical industry, rather than one that has undergone a major paradigm shift, then you're confident that the cycle will turn and good times will be back," he said.
Geller believes 2009 will be a down year for hotels, but "we may see incredible strength in the market by 2010. The good is the supply situation. Once the hotels currently under construction go online, you'll see very little new development for awhile."
Lodging Hospitality, in conjunction with the Penton Commercial Real Estate Group and The School of Hospitality Business at Michigan State, sponsored the inaugural MLIS, which drew 500 owners, operators, developers and brand executives to the three-day meeting at the Sheraton Chicago.
"Sure, things suck right now: The airlines are in trouble. Consumer confidence is very low. Construction costs are high," he told the audience. "But there's nothing we can do about it, so stop whining. We all need to look forward while we manage the situation as best we can."
While he doesn't advocate rate discounting as a viable tactic during these tough times, Geller believes ADRs may contract, "not so much because we're offering discounted rates but because our mix of business will change during this period."
While for many years Geller was a stern critic of the way brand companies managed his properties, he sung their praises during his remarks, saying, "They finally get it. They've done a tremendous job in recent years."