LOS ANGELES, CA— The prevailing tone was set early for day two of the Americas Lodging Investment Summit (ALIS) here when a panel of top hotel and travel organizations took center stage to deliver their “Travel Industry Outlook;” a bit of futurecasting that shaped up as being considerably brighter mid- and long-term than it was for the months immediately ahead. With Chase Burritt, national director/hospitality services for Ernst & Young LLP, bowing out as moderator for the opening general session, lodging chieftains Stephen Bollenbach of Hilton Hotels Corp., J.W. “Bill” Marriott Jr. of Marriott International, and Henry Silverman of Cendant Corp. were joined by David House of American Express Co. and Continental Airlines’ Larry Kellner. Together, the panelists aired a mostly cautious— but nonetheless hopeful— forecast for the short term, while noting things looked considerably better somewhat farther out. Not surprisingly, major concerns cited as impediments to any quick improvement/turnaround for the industry included the likelihood of a war with Iraq, further terrorism incidents, a still-struggling economy, and profitability-damaging inroads by third-party Internet marketers. However, a sense of calm similarly was brought to the fore by Marriott, who said he has lived and worked through some half-dozen recessions and other downturns, thereby suggesting the industry’s cyclical predilection can be counted on to help right the currently listing ship. Other points pondered by the panelists dealt with: branding (unanimously recognized as an important factor); loyalty programs (deemed to be not only necessary but a tremendously powerful contributor to market penetration); timeshare (a segment demonstrating what could only be labeled a very bright future); and partnerships (recognized as absolutely essential if the industry is to continue moving forward). In another session on the annual meeting’s agenda, Public/Private Development initiatives were examined by Hyatt Hotel Corp. Senior VP Kevin Mallory, Construction Management & Development CEO James Salter, FaulknerUSA Chairman/CEO Mark Schultz, Stormont Hospitality Group LLC President Jim Stormont, and U.S. Bancorp Piper Jaffray Managing Director Robert Swerdling. With Wyndham International VP/Acquisitions & Development Matthew Sparks moderating, the group labeled such ventures as something of a “shotgun wedding,” and questioned just who gets to call the shots as they relate to hand picking the development team— the developer or the municipality? “If the developer isn’t willing to shoulder a big part of the risk, very often the project in question won’t proceed [primarily because so many cities are so financially strapped these days, so they either can’t or won’t assume that risk],” said Schultz. Summing up, it was predicted the industry could look forward to many more public/private deals including hotels taking shape down the line. Concentrating even more on the financial factors influencing the tenor of industry transactions was a late afternoon discussion of Wheelers & Dealers. Led by Sonnenblick-Goldman Co. Managing Director Mark Gordon. On hand to share their thoughts on private equity and alternatives were Remington Hotel Corp.’s Monty Bennett, Greenhill & Co. LLC Managing Director Peter Krause, Goldman, Sachs & Co. VP/Real Estate Principal Investment Group Jonathan Langer, and REH Capital Partners LLC Chairman/CEO Frank Nardozza. Highlights of this group’s collective assessment and outlook found Bennett and Nardozza describing themselves as net buyers, while Krause explained his firm always looks for at least 20% leveraged IRRs and Langer allowed there is considerable capital out chasing deals in today’s marketplace. Peering ahead, Nardozza said he could see further merger and consolidation activity— particularly involving second-tier operating companies and other small firms. More in line with the future as plotted by his firm, Nardozza said REH finds suites and
