HOTELS

Are yesterday’s luxury brands commonplace today?

A recent book by Mark Penn compellingly argued that there are no longer a couple of mega-forces sweeping us along, instead there are micro trends—small, under-the-radar forces that involve tiny percentages of the population but which are powerfully shaping our society.

As Generations X and Y shape today’s society, they no longer seem willing to stand by and wistfully aspire to the luxury goods they see the seemingly affluent enjoying. Not content to merely shape society with Ipods, the Internet and Starbucks, they want to have their aspirational goods and experiences now, and are changing the face of retailing, merchandising and luxury products consumption. Importantly they are forcing a widening divide between the affluent and the super-affluent, as the latter want to be...Read More

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Like a farmer searching the dusk sky for portents about tomorrow, so are we all scouring the news for snippets, signs and omens to help us understand what’s happening in the economy and how it will affect our businesses.

Is the United States going into a recession? Will the GDP be 1%, 2%, or even more next year, or might it be less? Will oil reach US$100 a barrel—and what will happen if it does? Will the Cubs win next year’s World Series? (Sorry, but like so many die-hard Cubbie fans, I would love to see them win the pennant just once before my dementia further sets in).

I am no soothsayer. I have often said that he who lives by the crystal ball inevitably ends up eating ground glass. So I won’t bother wasting your time with my forecasts of what will be. However, I’ve written before, and will repeat again here, that the global economy...Read More

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A few years ago author Malcolm Gladwell made the case that there was a “tipping point” at which the tiniest thing could bring about dramatic societal shifts. If anyone thinks he was wrong, just reflect on how many of us ask, or are asked, questions about how sub prime mortgages could have led to a liquidity crisis leaving us worried about a slow down, down turn, or even the “R” word—recession.

A recent book by Mark Penn, Hillary Clinton’s chief strategist, (and the man that helped Bill Clinton to his 1996 victory by the ultimate wooing of soccer mums) said Micro trends offers a compelling argument that “there are no longer a couple of mega forces sweeping us along, instead there are micro trends—small under-the-radar forces that can involve as little as 1% of the population, but which are powerfully shaping our society.”

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Let’s all agree that sub prime is not a below-grade cut of meat. However, let’s also agree that we are not seeing the financial markets or the free world as we know it come to a screeching end. This is blip, a moment in time. That’s about it!

The current wave of finger pointing recriminations and hysteria over the current volatility in the financial markets isn’t healthy for anyone. Of course being fed a steady diet of ever-so-wise talking heads on TV doesn’t help calm the nerves of all of us involved in lodging real estate and finance.

I stand back and think about what it all means for our business. I wanted to get back to the underlying basics in our industry:

First:

• Lodging supply growth is still at historically low levels;
• Lodging demand is high;
• Record number of room ni...Read More

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Gas at $76 a barrel;

airlines overbooked;

private plane travel reaching new highs;

GDP remaining healthy;

Wall Street bankers licking their lips over this year’s anticipated gargantuan bonuses;

transient travel strong;

families loading up the cars for trips;

exotic locations flourishing;

safaris so overbooked that the overtaxed animals are perhaps unionizing to try to get a day off from posing for the endless stream of amateur digital photographers;

room rates of US$1,000-plus not unknown;

house prices in the Hampton’s rising as arguments as which family has the best live-in chef rank high on the worry list of the investment bankers who have their obligatory South/East/West Hampton place;

the Dow Jones hitting 14,000;

Gen-X’ers traveling with at least one nanny;

cele...Read More

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You’ll have to read on if you want to find out what the word nimbyism means. Here’s a clue—it isn’t foreign!

However, this issue addressed in this tongue-in-cheek and exaggerated commentary is exactly about being foreign.

Have you ever wondered why, with the dollar so weak and the Euro and Pound so strong, we aren’t flooded with European tourists bragging to their friends about how cheap everything is in America?

Here’s a clue: Have you tried to get into the U.S, as a foreigner? Let alone gone through U.S. immigration at any of our airports as a foreigner?

A recent informal survey of European travel agents and selected tourists commented that the real experience and much publicized perceptions of inbound U.S. tourists is very negative toward the good old, and we believe friendly, U.S. of A....Read More

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The chattering cognoscenti of our industry have been busy again with their “oohs” and “ahs” about the US$23 per share price for Equity Inns. I don’t intend to give you an investment banker’s analysis of the deal, but I want to make a point or two to put the matter in a rational perspective.

Let me start with a statement and a premise – Equity Inns is a well run company with a good business model. Their modus operandi works as well in the good times as it does in the bad.

Providing they wouldn’t overstretch their balance sheet as the cycle rolls on (and based on history there is little evidence they would), they will have capacity to have a growth spurt when the cycle changes and the deals come up looking increasingly attractive.

Thus coming out of the next slow down, they would be stronger than before and poised to ...Read More

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The announcement of the new venture between Marriott and Ian Schrager has evoked a mixture of emotions from the self styled cognoscenti of our gossipy industry. From wry smiles to bellows of laughter and the inevitable caustic and sometimes witty jokes, everyone has something to say. The yuk it up e-mails are flowing like a swollen river, poking fun at others is an industry sport. The lack of true boldness in our business is an industry shame so the timid poke fun at the bold and then ultimately, lamely follow in their trail blazing footsteps.

I have to admit that it would be all to easy for me to come up with a series of comments on this relationship ranging from caustic to cutting, amusing to hilarious, however I will leave those cheap shots to the myriad shallow thinkers in our industry of lemmings. For that’s not what I really think.

The pragmatic realit...Read More

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Is it my imagination or are these mega-conferences of ours becoming almost unmanageable? It seems that gone are the days where we could wander around the pre-function areas or the cocktail parties and know you would casually meet the people you wanted to see.

Now meetings are set well in advance—often in suites of the conference hotel or outside the venue. Major cocktail parties seem to be attended only by those who weren’t invited to the endless plethora of vendor-oriented parties (bankers, brokers, franchisers, consultants, accountants, the list goes on), each bigger, flashier and more attention grabbing than their last or that of their competitors.

Gone are the days where the sessions were attended by the self-styled “glitterati” or “cognoscenti.” No, they are too busy in prearranged meetings. Long gone are the days when a se...Read More

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Slowly but surely the faces of our lodging industry owners are changing and sooner rather than later we will see fundamental differences in the way our industry is run.

The merger and acquisition trend that began earlier this year continued in April with Blackstone selling its extended-stay lodging portfolio to Lighthouse for US$8 billion; Highland Hospitality announcing it had accepted an offer to be acquired by JER Partners for US$2 billion; Eagle being acquired by Apollo for US$1.5 billion; and Accor selling the Red Roof Inn brand to a group of investors including Citigroup and Westbridge Hospitality Fund for US$1.32 billion. Now Legacy is being marketed and CNL Hotels & Resorts has disappeared. Equity Inns is conducting a “strategic review” and a more cynical person than I might think that some of the executives believe it is time to cash in rather tha...Read More

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Those of us baby boomers who’ve been around this business long enough remember the time when weekends in urban destinations were dreaded. Why?

Because the lodging week traditionally ended on Thursday and restarted again on Monday. Room wings would have shut down, staff were off, any business at any rate would be welcomed and ushered in like royalty during those lonely three nights when footsteps echoed down empty corridors.

How things have changed! With the resurgence of downtown living, retailing, and entertainment so has come the building up of our weekend business.

Instead of cavernous emptiness, now kids’ laughter fills the corridors. Instead of the “give away” rates of old, now weekend rates can be highest of the week. Instead of occupancies “maxing” out in the low 70%, now 80% is a real possibility. Is this a real ...Read More

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There isn’t a conference in our industry where that question isn’t posed to a panel of cognoscenti (self styled or otherwise). I listen to the all too glib answers and, more often than not, shake my head in bemusement.

Why? Our industry is not a game. It is not simple. There is no one answer. It is a composed of a series of multi-dimensional segments and sectors, each with its own pattern and trend lines. Each geographic region has its own unique characteristics, demand generators, growth, trends, and so on. Each is unique.

Then there is segmentation by pricing—with products ranging from budget to luxury. We all too willingly try to compartmentalize our customers into neat little boxes, and then readily assume they will stay in those boxes and perform like programmed robots. We all too easily ignore the reality that any one guest can have differe...Read More

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