ATLANTA—As the 24th annual Hunter Hotel Investment Conference got started at the Marriott Marquis, here, conference co-chair Bob Hunter noted he was taking the word “cautious” out of the phrase “cautious optimism” to describe current conditions.
Generally speaking, most of the prognosticators supported that theory with continued improvement expected. Taking a look at the macroeconomy was Dr. Rajeev Dhawan, director and professor economic forecasting center (shown), J. Mack Robinson College of Business, Georgia State University. In the opening session, “2012 Economy and Beyond: Its Impact on the Lodging Industry,” Dhawan noted, “We had a turn in September and it will keep on going.” He noted that followed the debt ceiling crisis in August, and business confidence had recovered by December.
Dhawan did caution, “Do not look at the unemployment rate for the next couple of years,” noting that the participation rate for the 16-24 year-old demographic is not representative. He concluded by noting that Europe will have a mild recession in 2012 but its effects on the U.S. economy will be limited and that oil prices remain the “great unknown.” Meanwhile, in a panel entitled “Statistically Speaking, the Past, Present and the Future,” Mark Woodworth, president, PKF Consulting, noted, “The main drivers of demand growth have been corporate profit growth and real personal income growth.” However, Woodworth further predicted, “We will see a slowdown in demand growth, particularly in the back half of the year.” According to Jan Freitag, SVP, Smith Travel Research, demand growth is expected to be 1.3% in 2012 and 2.0% in 2013.
Nevertheless, supply is expected to continue to remain in check, largely because of funding issues, according to Freitag. “Access to capital still seems to be a major issue. There’s not a whole lot happening right now,” he said, adding, “The smart money is building right now.”