ALIS report: Should we be dancing?

ALIS report: Should we be dancing?

Day one of the Americas Lodging Investment Summit (ALIS) has come to a close for me. I am in my nice room at the Hilton San Diego Bayfront with free WiFi to post this blog and a nice LG flat screen to keep me entertained. The owner of this hotel has made me happy by investing in these amenities, but the same owner is most likely not so pleased tonight as news from this first day of ALIS included the decision to move this event next year out of the Hilton and San Diego and back to Los Angeles and the new LA Live facility with its two Marriott hotels. You win some, you lose some.

The mood here today was filled with contradictions for me. On stage in front of 2,000 people, speakers were optimistic. They talked about how we have turned the corner and business is on the mend. In my private discussions, however, some industry leaders more accurately described how the rebound in the States has been more a result of a few large markets recovering. In too many other markets, the recovery, if it exists at all, in many cases is too little too late for debt-crushed owners. So, expect to see many more hotels default and taken over by lenders. The upside of this unfortunate situation is that the transaction market is heating up. While the workouts are complicated, the prices are right for buyers. They will acquire at bargain prices, invest and take advantage of the expected upside. Another cycle filled with winners and losers.

These conferences also tend to be filled with brands boasting about their overflowing pipelines. It isn’t easy to make such boasts today and they have, in fact, toned down the rhetoric. However, they can honestly brag about their development plans in emerging global markets. I sat in on a session about the true remaining lands of opportunity — Brazil, Russia, India and China. The discussion here was pretty frank and open. The lessons to be learned: be patient as the process is filled with obstacles, mostly all which can be overcome. Also, make sure your local partners can be trusted. While these are hardly revelations, they still can’t be stressed enough for those looking for new market opportunities.

After all the talk and meetings, the sun set in San Diego and the night was filled with parties hosted by the big brands battling for attention as well as go-go dancers at the conference cocktail. Are the go-go days back in the States? Let’s not get ahead of ourselves, nor be so quick to forget the industry fell hard and fast starting, making the road back to prosperity a long one. But at least today the arrow is pointing in the right direction and the long-term, global outlook remains filled with optimism.