15 October 2011
Optimistic keynote at the Dallas Lenders Conference from FelCor Chairman Tom Corcoran
One of the bright spots at Steve Van’s Fishing for Solutions lender conference was the keynote address given by FelCor Lodging Trust Chairman, Thomas J. Corcoran. Known for his blunt and sometimes salty candor, Tom sounded a call for a reality check for doomsayers, likes where we are now in the hotel industry and expects things to get better.
Yes, he reads the newspapers, knows all about the “market volatility” and pokes fun at how the world cringes on reports that Slovakia may not approve the European bailout of Greece. Everyone is over-reacting to news he says.
Here are the details . . .
FelCor Chairman Thomas J. Corcoran at Prism Hotels’ lender conference: “Public markets are not optimistic about the hotel industry. . . There is such a disconnect between the markets and reality. They keep getting it wrong and they will this time too. I don’t think the doom and gloom scenario is very likely. . . I feel good about where we are.”
Corcoran at Fishing for Solutions
In his keynote at Prism Hotel’s 11th lender conference (Fishing for Solutions), FelCor Chairman Tom Corcoran provided a welcome note of optimism. (For other insights provided at the Dallas lender conference, click Hotel Lawyer in Dallas listening to the Special Servicers.)
Noting the recent dive in stock values, Corcoran observed that the public markets are not optimistic about the hotel industry.
But he said, “You have to feel good about the Smith Travel Research numbers and projections for 2012, if they are real. I think the year will turn out a lot better. We will continue to see general improvement.”
Corcoran acknowledged that there is a lot of uncertainty out there. But compared to a year or two ago, deals are getting done.
He had high compliments for the special servicers in attendance, saying “This has not been kick the can down the road. The lenders are extremely bright. They adopted an approach that has gotten a lot more money for their stakeholders.”
In looking back, Corcoran thinks that people will say most of the lenders were very smart and avoided the mistakes of the past.
And Corcoran believes that people are going to look at hotels as a good place to get a better yield, so we will see money invested in our industry in 2012.
The markets get it all wrong.
Here are a few more of Corcoran’s observations.
“The public markets keep predicting doom and gloom but they keep getting it wrong. There is such a disconnect between the markets and reality that they keep getting it wrong and they will this time too. I don’t think the doom and gloom scenario is very likely.”
“There is so much over-reaction to any negative news. Like what will Slovakia do on the Greece situation.”
“The one thing we cannot control is the public sentiment — how people feel. People act on their perceptions. If they feel good, they do more.”
“This pattern of slow recovery discourages stupid money and stupid investors. That is good for us in the hotel industry.”
“If you are in the business and you take opaque reservations, you are an idiot. You cannot make any money on this kind of business. The business does not reflect real cost of the reservation. You are better investing in another sales person and getting real profit to the bottom line.”
“There will be an OTA study coming out soon that will be helpful to get people to make better decisions.”
“This is all about the revenue side. I feel good about where we are.”
Kris Hudson of the Wall Street Journal has an excellent article on Mr Corcoran’s presentation at this event. To read it, click FelCor Chairman: Decline of Hotel Stocks Ignores Industry’s Results
This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We’ve done more than $87 billion of hotel transactions and have developed innovative solutions to unlock value from hotels. Who’s your hotel lawyer?
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