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Observations from NYU

Considering the past two years, the vibe at the 44th NYU hotel investment conference has been upbeat – of course it almost always is when you are on stage in front of some 1,500 of your closest friends and competitors.

Glitter and glam returned at some of the after parties, masks were off – except among the hotel staffs – and one could sense a big exhale as the new normal started to feel – normal, at least for now.

Rising room rates continue to outpace the headwinds of inflation and managing with less staff (partially intentionally) is being managed better with each passing week – despite anecdotal commentary about service levels suffering at the upper end of the market.

Tuesday morning’s CEO panel (l. to r.) Eileen Crowley, Deloitte; John Cohlan, Margaritaville; Sloan Dean, Remington Hotels; John Murray, Sonesta International Hotels; Peter Strebel, Omni Hotels & Resorts; Jeff Wagoner, Outrigger Hospitality Group

Even length of stay is expanding and spend is higher as guests want to splurge when they do travel. As a result, some hoteliers spoke about expanding services because they believe the rebound is sustainable.

On the other hand, others are worried about a recession that might run deeper than anticipated and reverberate through the hotel marketplace before the end of this year. Increasing interest rates already seem to be having a chilling effect on pipelines as the usual boasts about growth from the major players seemed more muted the past few days. Somewhat surprisingly and despite on-stage boasts, the usual barrage of press release announcing bigger deals, new brands and expanding pipelines were mostly absent from my in-box.

Yes, deals are getting done, especially via conversions, but transaction volume does not appear to be as buoyant as one would expect. Certainly, rising interest rates are playing a role and deal-killing bid-ask spreads persist.

But, again, everything placed into perspective, NYU 2022 feels positive and reassuring that the worst of the pandemic-related stresses are behind us. Most owners and operators have adjusted to the new normal and are better prepared for whatever might be ahead.

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