Recent Posts
- It's All About Supply
- On My Mind
- What’s Happening Out There?
- Microtrends = Micro Marketing?
- Changing Markets – What’s Going On
- The Lazy, Hazy, Crazy Days Of Summer
- NIMBYISM
- The Price Is Right - Or Is It?
- Marriott and Schrager
- NYU and Other Conferences
Recent Comments
- Osama on It's All About Supply
- Ted Mandigo on It's All About Supply
- Giovanni on It's All About Supply
Most Commented On
Archives
It's All About Supply
It has been a year since the first glimmerings of economic problems surfaced to the public at large. Some ignored the issue while others thought any problems would be local and limited to a small section of the housing market.
The international community assumed that this was now a global economy with the new engines of economic growth making everyone else independent of the vicissitudes of the U.S. Thus, it was glibly presumed, other nations would be immune.
It wasn’t until late in 2007 that even those with an ostrich-like mentality realized this wasn’t a problem limited to a few homeowners who had over-borrowed on mortgages aggressively offered to them by slick, commission-driven salesmen whose only motive was quantity and not quality. After all, the financial markets’ insatiable appetite for sliced, diced and packaged debt had to be assuaged l...Read More
On My Mind
A recent book by Mark Penn compellingly argued that there are no longer a couple of mega-forces sweeping us along, instead there are micro trends—small, under-the-radar forces that involve tiny percentages of the population but which are powerfully shaping our society.
As Generations X and Y shape today’s society, they no longer seem willing to stand by and wistfully aspire to the luxury goods they see the seemingly affluent enjoying. Not content to merely shape society with Ipods, the Internet and Starbucks, they want to have their aspirational goods and experiences now, and are changing the face of retailing, merchandising and luxury products consumption. Importantly they are forcing a widening divide between the affluent and the super-affluent, as the latter want to be...Read More
What’s Happening Out There?
Is the United States going into a recession? Will the GDP be 1%, 2%, or even more next year, or might it be less? Will oil reach US$100 a barrel—and what will happen if it does? Will the Cubs win next year’s World Series? (Sorry, but like so many die-hard Cubbie fans, I would love to see them win the pennant just once before my dementia further sets in).
I am no soothsayer. I have often said that he who lives by the crystal ball inevitably ends up eating ground glass. So I won’t bother wasting your time with my forecasts of what will be. However, I’ve written before, and will repeat again here, that the global economy...Read More
Microtrends = Micro Marketing?
A recent book by Mark Penn, Hillary Clinton’s chief strategist, (and the man that helped Bill Clinton to his 1996 victory by the ultimate wooing of soccer mums) said Micro trends offers a compelling argument that “there are no longer a couple of mega forces sweeping us along, instead there are micro trends—small under-the-radar forces that can involve as little as 1% of the population, but which are powerfully shaping our society.”
...Read MoreChanging Markets – What’s Going On
The current wave of finger pointing recriminations and hysteria over the current volatility in the financial markets isn’t healthy for anyone. Of course being fed a steady diet of ever-so-wise talking heads on TV doesn’t help calm the nerves of all of us involved in lodging real estate and finance.
I stand back and think about what it all means for our business. I wanted to get back to the underlying basics in our industry:
First:
• Lodging supply growth is still at historically low levels;
• Lodging demand is high;
• Record number of room ni...Read More
The Lazy, Hazy, Crazy Days Of Summer
airlines overbooked;
private plane travel reaching new highs;
GDP remaining healthy;
Wall Street bankers licking their lips over this year’s anticipated gargantuan bonuses;
transient travel strong;
families loading up the cars for trips;
exotic locations flourishing;
safaris so overbooked that the overtaxed animals are perhaps unionizing to try to get a day off from posing for the endless stream of amateur digital photographers;
room rates of US$1,000-plus not unknown;
house prices in the Hampton’s rising as arguments as which family has the best live-in chef rank high on the worry list of the investment bankers who have their obligatory South/East/West Hampton place;
the Dow Jones hitting 14,000;
Gen-X’ers traveling with at least one nanny;
cele...Read More
NIMBYISM
However, this issue addressed in this tongue-in-cheek and exaggerated commentary is exactly about being foreign.
Have you ever wondered why, with the dollar so weak and the Euro and Pound so strong, we aren’t flooded with European tourists bragging to their friends about how cheap everything is in America?
Here’s a clue: Have you tried to get into the U.S, as a foreigner? Let alone gone through U.S. immigration at any of our airports as a foreigner?
A recent informal survey of European travel agents and selected tourists commented that the real experience and much publicized perceptions of inbound U.S. tourists is very negative toward the good old, and we believe friendly, U.S. of A....Read More
The Price Is Right - Or Is It?
Let me start with a statement and a premise – Equity Inns is a well run company with a good business model. Their modus operandi works as well in the good times as it does in the bad.
Providing they wouldn’t overstretch their balance sheet as the cycle rolls on (and based on history there is little evidence they would), they will have capacity to have a growth spurt when the cycle changes and the deals come up looking increasingly attractive.
Thus coming out of the next slow down, they would be stronger than before and poised to ...Read More
Marriott and Schrager
The announcement of the new venture between Marriott and Ian Schrager has evoked a mixture of emotions from the self styled cognoscenti of our gossipy industry. From wry smiles to bellows of laughter and the inevitable caustic and sometimes witty jokes, everyone has something to say. The yuk it up e-mails are flowing like a swollen river, poking fun at others is an industry sport. The lack of true boldness in our business is an industry shame so the timid poke fun at the bold and then ultimately, lamely follow in their trail blazing footsteps.
I have to admit that it would be all to easy for me to come up with a series of comments on this relationship ranging from caustic to cutting, amusing to hilarious, however I will leave those cheap shots to the myriad shallow thinkers in our industry of lemmings. For that’s not what I really think.
The pragmatic realit...Read More
NYU and Other Conferences
Is it my imagination or are these mega-conferences of ours becoming almost unmanageable? It seems that gone are the days where we could wander around the pre-function areas or the cocktail parties and know you would casually meet the people you wanted to see.
Now meetings are set well in advance—often in suites of the conference hotel or outside the venue. Major cocktail parties seem to be attended only by those who weren’t invited to the endless plethora of vendor-oriented parties (bankers, brokers, franchisers, consultants, accountants, the list goes on), each bigger, flashier and more attention grabbing than their last or that of their competitors.
Gone are the days where the sessions were attended by the self-styled “glitterati” or “cognoscenti.” No, they are too busy in prearranged meetings. Long gone are the days when a se...Read More
Changes, For Better or Worse
Slowly but surely the faces of our lodging industry owners are changing and sooner rather than later we will see fundamental differences in the way our industry is run.
The merger and acquisition trend that began earlier this year continued in April with Blackstone selling its extended-stay lodging portfolio to Lighthouse for US$8 billion; Highland Hospitality announcing it had accepted an offer to be acquired by JER Partners for US$2 billion; Eagle being acquired by Apollo for US$1.5 billion; and Accor selling the Red Roof Inn brand to a group of investors including Citigroup and Westbridge Hospitality Fund for US$1.32 billion. Now Legacy is being marketed and CNL Hotels & Resorts has disappeared. Equity Inns is conducting a “strategic review” and a more cynical person than I might think that some of the executives believe it is time to cash in rather tha...Read More
Summer In The City
Those of us baby boomers who’ve been around this business long enough remember the time when weekends in urban destinations were dreaded. Why?
Because the lodging week traditionally ended on Thursday and restarted again on Monday. Room wings would have shut down, staff were off, any business at any rate would be welcomed and ushered in like royalty during those lonely three nights when footsteps echoed down empty corridors.
How things have changed! With the resurgence of downtown living, retailing, and entertainment so has come the building up of our weekend business.
Instead of cavernous emptiness, now kids’ laughter fills the corridors. Instead of the “give away” rates of old, now weekend rates can be highest of the week. Instead of occupancies “maxing” out in the low 70%, now 80% is a real possibility. Is this a real ...Read More