20 September 2011
Hotel Lawyer at the Phoenix Lodging Conference: Where are we going from here?
The Lodging Conference kicks off tonight at the Arizona Biltmore as roughly 1,500 hotel industry leaders gather for the next 3 days. This is one of my favorite hotel finance conferences of the year, and JMBM’s Global Hospitality Group® will be well represented. Senior GHG members Guy Maisnik, Cathy Holmes, Bob Braun, David Sudeck and I will all be here.
Aside from the great connections and catching up, the one thing everyone at this conference will be looking for is some sense on what happens to the hospitality industry from here. The first part of the year was robust transactionally speaking, with lots of hotels changing hands and pretty good financing for established hotels with good cash flow. But it seems like everyone got spooked a little in late August about the time Congress was deadlocked on a budget. Then the U.S. credit rating was downgraded, and the European debt crisis has continued to foment trouble, initially focused on Greece, but now more on Italy with its credit rating decrease, with concerned looks toward Spain and elsewhere.
On the one hand, one can argue that all this should have no affect on the hotel industry, at least in the United States. But the markets are unsettled and everyone seems to be taking a second look before they continue with business as it was earlier this year. And of course, the lodging industry has a long-term direct correlation with the economy. So, if the increasing pessimism pointing to an impending recession wins the day, we are all in for a bumpy ride.
I will be very interested to measure the mood of The Lodging Conference this year, and see how everyone else is viewing the current situation. Do we catch our breath and continue from roughly where we were, or do we hold our breath and get ready for a roller coaster ride? I may have some more insights for you shortly.
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