Power Panel Examines State Of The Industry, Today And Tomorrow

PHOENIX— The word from the top— as delivered at the Friday Power Panel presentation of the Eighth Annual Lodging Conference here— is that while economic as well as hotel-operating conditions are admittedly bad, they could be worse… and, conceivably, might well be just that before too long. Leading off the session were American Hotel & Lodging Association Chairman Kirby Payne and Asian American Hotel Owners Association Mike Amin, concurring that consumer confidence in travel is obviously down, with Payne suggesting: “Maybe the [consumer]press would do well to stop telling everybody how bad the market is doing?” Other than advocating working more closely with your respective industry associations, the advice of Amin and Payne to help overcome this softness in the marketplace was to “incentivize everyone” to get them to be an active participant in the overall sales process. Following Amin and Payne to the stage was a trio steeped in what it takes for a hotel chain (or brand) to survive tough economic times: Steve Belmonte, former head of Ramada and at this time with Hospitality Solutions; Jim Evans, who recently resigned as president/CEO of Best Western International; and Chuck Ledsinger, president/CEO of Choice Hotels International. Opening up the discussion on a somber note, Belmonte suggested: “We could be in for the worst November in the history of our industry.” This advisory was an allusion to the potential for a war with Iraq; an event which could easily cause the traveling public to “hunker down and watch the war on TV.” By way of contrast, he maintained: “When the economy finally gets better, [the industry]will get better with it.” Ledsinger, meanwhile, said he and his organization feel there’s more to fear from a continued dismal economy than from the threat of war. But no matter, he said, noting “this too will pass; we just have to keep plowing through.” On the other hand, Evans maintained what the American public is watching most these days is the state of the financial markets. In line with this, he claimed there may already have been a long-term change or shift in business-travel patterns. Moreover, if the current state of fiscal distress lasts much longer, Belmonte contended: “Someone will always own hotels, but the question is will that someone be an entrepreneur or a banker/lender?” Last to step up to the stage was Maritz, Wolff Chairman Lew Wolff, who quickly got the attention of much of the audience when he proposed: “This just might be a better time to sell [a hotel]than to buy.” To an extent, some of his observation was based on levels of new construction— or, to be more precise, the lack of it. As Wolff explained: “Lots of new-construction activity gets done because it’s mandated by public-market pressures. Additionally,” he said, “[it seems]developers are forever answering the siren song of municipal incentives [to build new product].” In his opinion, too often new-building is not demand-generated but rather a brand-generated or owner-generated undertaking.—Michael Billig