Optimism about the U.S. hotel business was flowing like Kool-Aid at the opening session of The Lodging Conference on Wednesday at The Arizona Biltmore in Phoenix.
Fueling the rosy outlook were forecasts about increased consumer spending, a big increase in manufacturing orders, a bump in foreign demand for goods and services, banks more willing to provide credit, fewer delinquencies, a supposed housing rebound and projected declines in oil prices. “Even the smart people are getting back into the segment,” quipped Tom Corcoran, chairman of FelCor Lodging Trust. “Enjoy what we have now because we all know the [expletive] will come.
Put capital into cash-flowing businesses, suggested panelist Nancy Johnson, executive vice president of development for Carlson Rezidor Hotel Group, who added that new U.S. Commerce Secretary Penny Pritzker will be a real ally to the hotel industry, encouraging things like public-private partnerships.
However, the voice of reason in the room came from two corners. First, data shows spending on new development and renovation is up 30% this year, suggesting supply growth will start to outpace demand growth.
And then the 1,500 attendees heard Best Western International CEO David Kong say, “We must be mindful to plan for whatever will come. Supply is coming and the industry in the U.S. may be past it’s peak. The strategy must be how to grow your share of the pie because the pie is not growing.”