PHOENIX— The Lodging Conference, being held here this week, is providing a venue for an industry that has become comfortable with the fact that this is a cyclical business and that recovery, while not in the imminent future, will come in due time. That’s a far cry from the Lodging Conference held this past January, where some attendees walked away from the event shaking their heads at the overly optimistic consensus of panelists who believed recovery from the disastrous downturn was just months away, in the third quarter. Pundits here on the opening day professed to not knowing whether recovery would occur in 2003 or 2004 or even beyond, while actual hotel owners and operators laid out plans to prepare them well for when recovery does come along. Starwood Hotels and Resorts, for example, officially debuted its prototypes for both Westin and the newly revived Sheraton at a well attended evening event, quoting price per key figures meant to be appealing to the development professionals in attendance. (see HOTEL BUSINESS®, Sept. 21, 2002) YPB’s Peter Yesowich, meanwhile, noted that the new trend of families wanting to spend time together would lead to an uptick in family-related travel in 2003, while Howard Johnson’s CEO Mary Mahoney told HOTEL BUSINESS® that her brand aimed to take advantage of this trend by expanding its relationship with Crayola through the development of Disney-store like retail outlets in some of its hotel lobbies. The Cendant-owned brand is also looking at rolling out a “pet-friendly” strategy at hotels throughout the country, for those families that don’t want to leave home without their dogs or cats. HVS’s Steve Rushmore struck perhaps the most optimistic note in the day’s presentations, noting that the period from 1990/91 was the best time to invest in his hotels, while “now is the second best.” Why is this period of down occupancies and operating profits presenting premium opportunities? Rushmore said that currently, most markets in the United States are not overbuilt with little new supply coming online in the near future. Meanwhile, the recession that is trying to recede will indeed end at some point, meaning demand for hotel rooms will return over the next 12 to 24 months. The Internet made its way into several conference discussions, with most speakers attesting to the fact that hotels today are harming their business by giving too many rooms over to third-party web distributors. While most indicated there was no clear indication of when hotels would recover from under-pricing themselves on the Internet, Rushmore assured the audience that the anticipated return in occupancy would help raise room pricing and hence put an end to online discounting. Prior to unveiling Starwood’s new prototypes, Ted Darnall, president of the company’s new real estate division, said that a brand extension for the hip W hotels brand is being considered, which would include a residential component. Such a product would be aimed at 30-something, urban, affluent consumers, he added. Meanwhile, the word to those exploring hotel-investment opportunities via the franchise route, as handed down to attendees by Days Inns Worldwide President/CEO Joe Kane, is essentially a simple: “Avoid the cookie-cutter mentality… if you are determined to be successful.” Sharing his words of wisdom during the course of a special roundtable session, Kane maintained, “The best way to differentiate yourself is to create [what I call]visible guest value.” Moreover, the long-time Cendant Corp. executive said his suggested way of doing that is, pure and simple, through the delivery of “service above and beyond” to the guest. On the other hand, he noted recognizable curb appeal doesn’t hurt either (as a more tangible way of separating one’s property from competitors). Joining Kane at the table was Marriott International EVP – Owner and Franchise Servi
Ted Darnall and Steve Rushmore