HOTELS

Roger Hill

I Haven’t Got Time For The Pain
July 28, 2008

Having just returned from the Midwest Lodging Investors Summit in Chicago last week, the tone of the two days was clear. We heard again and again, “Good times will come again, we promise,” and “no one is quite sure when.”

Whether recovery comes in 2009 or in 2010, every graph and pie chart presented over the two days said the same thing: The phoenix will again rise from the ashes. It reminded me of what we saw in the hospitality industry in the early '90s and even more strongly following the challenging days of 9/11. These were scary times in our industry’s history and many doubted their end. Bunkering down and protecting our assets is a vital measure during a time like this. However, strategically taking these quieter times to position your property and be ready to enjoy growth during brighter times and successes is paramount.

Here is a thought on strategy: In the years following 9/11, our economy saw a considerable uptick. Operators who hadn’t taken the precious, slow days of 2002 and seen them as an opportunity and invest in their properties, upgrade offerings and add amenities, may have had an easier time presenting their P&L to ownership in the short term. However, when the economy improved and business was flush, these same operators found themselves voluntarily displacing inventory to accommodate the property upgrades that their locations so desperately needed. I am guessing that in the long term, that P&L was even more painful to present to ownership as leaving money on the table is rarely smiled upon.

There is a lot of pain out there right now. While the pain will subside on its own eventually, what is important now is to take an aspirin and strategically look at the next 12 to 18 months. Do you think you are going to shift your five- to 10-year renovation plan to a 10- to 12-year plan? I am sure that will feel good today, but how will your guests feel about that four to six years from now?

These are the times to envision our futures and plan for sunnier days. Owners and operators, unhand that red pen and stop that slash impulse; temper it with a dash of long-term strategy. You will thank me in ’09... or ’10.

Posted by Roger Hill on July 28, 2008 | Comments (1)