It?s that time of year again when all the industry analysts and attendant experts dust off their crystal balls and offer us their insight into the year ahead. The process has already begun, and I?m here looking at four forecasts?two for a slower year for the industry, and two for a slightly good year. So before the flood of additional forecasts begins, and with a dead heat in hand, I?m going to offer my slightly non-scientific projections which I have been doing with some moderate success for the past few years. The difference is that I base my so-called findings on what I discover from hotel developers/owners at industry events, rather than the technical mumbo-jumbo of all the other forecasts. As a result of my position here at HOTEL BUSINESS?, I am obliged to go to most of the industry shows and meetings during the year, many of which have been held in the last several months. So after attending Bass Hotels & Resorts; Best Western International; and Choice Hotels Conferences; The Lodging Conference and the International Hotel/Motel & Restaurant Show and mingling with about 15,000 owners and managers I think I get a good sense of what is going on in the trenches all across the country. In many ways, I think it is a lot better than someone sitting in an office tower in New York City trying to make sense of economic projections and applying them to the hotel industry (no offense to those who do). We all know there is a lot of concern regarding overbuilding, mostly in the economy sector. It has affected occupancy for many hoteliers, but appears to be a problem only in certain regions. In general, it has not taken owners into the red because rates are still holding up thanks to the continued strength in the full-service arena. With the upper-end of the market able to sustain their rate structure, an umbrella is kept over most of the market with regard to rate erosion. Even though there is some new construction in the full-service area, stricter lending policies are keeping this segment tight. So where are we headed in the year 2000? According to my simplistic model, I believe profitability next year will continue to be good, not record setting. Attendees at the 1999 fall meetings were in good spirits and in a buying frame of mind, which tells me that most of them are going into next year confident that they will continue to do well. That is not so for the public companies. They are facing a loss of interest among investors who don?t see the record profits of a few years ago returning. So their stock prices are suffering even though earnings are good. But, that is not good enough for Wall Street, which keeps investing in Internet stocks where losses continue in record numbers. Go figure. I?m sure we will see more of the public companies looking to go private next year, or at least to continue to buy back stock. There are some concerns about the economy in general, which could affect the industry. But there are always concerns. Next year is an election year and our industry always tends to do well in an election year. So I for one will take the path of optimism for 2000. It will just be a little tougher to make a dollar.
