LOS ANGELES Who better to predict hotel marketplace gyrations than those directly responsible for cause and effect within it? Such was the case at this year s UCLA Hotel Industry Investment Conference here when a roundtable of financial-sector leaders squared off with a decidedly opinionated audience during a day s-end working session.
ResortQuest International s Michael Murphy and Hilton Hotels Matthew Hart served up a bevy of questions to the audience as well as to a panel comprised of Morgan Stanley Dean Witter s Jackson Hsieh, Richard Weissman of Goldman Sachs, Mark Elliott of Hodges Ward Elliott, Steve Goldman of Starwood Hotels & Resorts, Rick Rohrbach of Credit Lyonnais, Strategic Hotel Capital s Laurence Geller, Prudential Mortgage Capital s David Twardock, and Tom Arasi of Harbinger Advisors.
What was found was that few instances saw a convergence of opinion between the pros on-stage and those seated in the audience. According to those in attendance, the coming year should see: industry RevPAR climbing somewhere between 1% – 3%; C-Corp. earnings weighing in between 5% – 10%; total returns for hotel REITs in the 10% – 12% range; and 10-year Treasury rates coming in between 4% – 6%.
Perhaps surprisingly, there was similarly little agreement among the spotlighted financial leaders themselves. The only thing they all agreed on was that in terms of mergers and acquisitions the next big deal will see Bass Hotels & Resorts buying somebody.
Ultimately proving almost as agreeable to the panel (with seven of the eight seated in accord) was the contention that lodging entities in today s market are better suited as private rather than public companies. (1/19/01)