Panelists Make Industry Predictions During Opening Session

PHOENIX— During the opening session of the Lodging Conference, which kicked off today at the Arizona Biltmore here, financial panelists gave their take on the current industry conditions. Steve McKenzie, managing director/Eastdil Realty, said, “The difference in [asset]progress is as wide a gap as I’ve seen.” McKenzie added, however, that hotel asset performance has declined more than asset value. Jonathan Gray, senior managing director of Blackstone Real Estate Advisors, concurred, “The best buying opportunities occur when there is maximum distress. I see don’t this happening yet.” The power of a brand name was touted by panelist Anupam Narayan, interim president/CEO of Best Western International. In his perspective, “the lower down the chain you go, the more important a brand is.” Brands, however, are not necessarily as important for high-end trophy hotels, stated Narayan. Predicting hotel conglomerates might soon break apart, Mike Shannon, president/CEO of KSL Recreation Corp. (which owns the Biltmore Hotel), said, “LBO shops will go after this industry in the next year.” Shannon added that, in his opinion, the mergers that occurred “didn’t work because shareholders lost value in their stock prices.” He explained that hotel conglomerates will soon begin spinning off some sub-standard brands that have high overhead, “because they can’t afford to feed all the children.” —Ruthanne Terrero