NATIONAL REPORT— Management company executives are anticipating a good, but not great year, as the economy remains a big question mark. “We’re seeing some turbulence because of economic uncertainty, but we don’t expect the economy will be terrible. It will be a pretty decent year,” said David McCaslin, president of MeriStar Hotels & Resorts. For the year to date, business has been “about what we expected,” McCaslin said. “Things have slowed up, and there is not as much turnover with existing properties, but times are pretty good.” Tishman Hotel Corp. is finding business to be “okay, but not great,” with variations evident by market, according to John Griswold, president. “Florida is fine, the Caribbean has been off while Chicago and Los Angeles have been good.” Griswold noted softness exists in the group area. “Meeting planners are not getting the business. Many companies are advising their travel departments to be careful and not send so many people to this or that meeting. There is a little pullback here and there,” he explained. Destination Hotels & Resorts has likewise seen some fall-off in the meetings business, according to Charlie Peck, president/COO. “But we’re generally happy although very, very cautious. Many of our hotels are meeting or beating business plans,” he said. In terms of specific markets, Peck noted “there is a little pressure in Arizona and California but that has been offset by an excellent year in the Rocky Mountains where the winter has been good with a lot of snow. The East and San Francisco are also strong.” Interstate Hotels’ Chairman/CEO Thomas Hewitt described business in certain geographic regions like the Midwest and Southwest as “spotty,” but noted that in the Northeast, it has been strong. Hewitt said that January “was pretty much on target and in February there was softening, but we anticipate we’ll get out of the first quarter okay.” Many Challenges In assessing the biggest challenges management companies face this year, Peck put meeting owners’ expectations at the top of the list. “We’re coming off nine years of extraordinary growth with double-digit profits. Now we have more normalized growth and there is pressure to maintain the revenue stream and demonstrate our expertise in managing expenses and showing profits,” he said. Peck added that management companies have encouraged owners to invest in their properties in order to stay current with technology, to add amenities, and to ensure quality service. “Investors are looking for returns,” he said. Hewitt noted that owners are tuned in to the market more so than in the past. “Owners are more realistic now and they have their hands on the pulse of the industry. They are better informed and know how the market is going,” he said. Diane Parmerlee, senior vp/development at Wyndham International, feels the fact that owners these days are more knowledgeable and demanding is beneficial for the management company. “It keeps us honest! Owners are very active these days and that’s good for us,” she said. Watching markets for signs of softening and reacting quickly is key to meeting challenges in the management business, Peck indicated. “We have put huge emphasis on forecasting at least six months out and [continually]look for any signs of weakness so we can shift our time and attention” to any areas that need attention, he said. Financing will be a major challenge for some management companies this year, according to Larry Wright Sr., president of Wright Investment Properties. “Companies who don’t have a strong track record will find it especially difficult to get financing,” Wright said. The tight labor market will also present problems for management companies, Wright added. “It will be difficult to find line personnel, especially in any markets close to gaming properties because of the large amount of staff required,” he said. “The labor market is still very tough,” agreed Douglas Vicari, senior vp/CFO, for Prime Hospit
