NEW YORK—A quartet of CEOs representing some of the largest global lodging players were overall bullish on the hotel industry and the outlook for continued prosperity during the kickoff session of the 37th Annual NYU International Hospitality Investment Conference being held here at the Marriott Marquis.
Moderated by Katherine Lugar, president/CEO of the American Hotel & Lodging Association, “The View from the Top” brought together Geoff Ballotti, president/CEO, Wyndham Hotel Group, LLC; Sébastian Bazin, chairman/CEO, Accor; Mark Hoplamazian, president/CEO, Hyatt Hotels Corp.; and Christopher Nassetta, president/CEO, Hilton Worldwide.
“The next few years are going to be exceptionally good years in this business; among the best years that we’ve seen. And, I think it’s the simple laws of economics at work. While supply is inching up a little bit, it is still at historically low levels…demand, while not raging, is growing at a fairly steady pace…the U.S. economy, most people would believe it is stable…put those things together—a stable, moderate growth and recovery for the next few years against very moderate supply additions—supply being less than demand— is going to be good things for our business,” said Nassetta.
Hoplamazian added, in the U.S., “A lot of people are hyper-focused on GDP [in relation]to RevPAR and the business in the industry…corporate profitability continues to grow at a rate actually in excess of GDP growth and that’s driving a lot of business travelers. I think a lot of people were waiting around for group business to recover and, pay attention: in case you missed it, everyone: it’s back.”
Bazin remarked that, “We live in a blessed industry. The numbers, the demand for international travelers, is going to be growing 4% to 5% further; and the increase of supply, 2% to 3% maximum.” He felt that would leave the industry “OK” for the next several years.
Ballotti pointed out the industry is in the 57th month of its cycle and “and it’s feeling more and more like the cycle that began in 1992 and ended in 2000. That 112-month cycle has a lot of characteristics that are very similar to the cycle we’re in today. While there’ll probably be a lot of discussion this week that it’s been five consecutive quarters of supply growth that has been more than it has been up until these past five quarters, you still only have to look at our domestic pipeline and where it’s at—450,000 rooms—and compare it to where it peaked at the turn of the last cycle to realize that this cycle has a long way to run.”
—Stefani C. O’Connor