ALIS notebook: Slow burn

With a near-record 2,800 people this week attending the Americas Lodging Investment Summit (ALIS), veterans of the business usually start looking over their shoulders because in the past big crowds tended to signal a peak in the cycle. This week, it just didn’t feel that way.

A slow but sure economic growth forecast by the economist on stage at the opening session was music to the U.S. hotel industry’s collective ears. He talked about 2.5% economic growth in the U.S. for 2015-2016 and strong indicators from the manufacturing and service sectors – not spectacular growth, but good enough to drive travel and meetings growth.

Couple that with reasonable leverage and supply growth, along with RevPAR growth that apparently has yet to peak, and it sets the table for two to four years of hotelier happiness.

Indeed, the gathering of the clan at ALIS felt almost giddy. Barring any Black Swan events, forecasts for record transactions, announcements about new lifestyle brands, discussions about continued opportunities in the Middle East, Africa and Asia Pacific had everyone feeling pretty secure about the industry’s near-term prospects.

The only head-scratcher, and it is a big one, was the growing concern about the continued disintermediation of the booking cycle. Disruption was a word on everyone’s lips as incredibly-valued, tech-driven companies like Expedia, Google, Amazon, Airbnb and the like eat at hotelier’s margins, and the industry still seems to be at a loss about what to do about it.

But even that hugely important issue was not enough to sour the mood. Hyatt launched Hyatt Centric, a stylish, full-service lifestyle brand with teeth as it will come out of the gate quickly with 15 conversions in 2015 coming from existing owned, managed and franchised properties. Eric Danziger launched the Début Hotel Group with a bold plan for 300 hotels under five brands within 10 years. Marriott announced it had acquired Canada’s Delta Hotels and as wll as its first Moxy in the U.S. In one-on-one interviews, Langham explained plans for a new brand, and one of my new favorite CEOs, Accor’s brash Sebastian Bazin, talked about his plans for “hundreds of millions” in acquisitions this year, as well as his determination to create a vehicle to compete with all the disruptors stealing his margin.

Yes, the idea of a slow but steady roll for the U.S. economy had just about everyone at ALIS feeling confident that this time the big attendance number was not a harbinger of pending bad news.