Second City Smash
They came to Chicago looking for answers: Where is the economy headed? What's the outlook for the hotel industry? What are the opportunities for hotel and vacation ownership development? What's the climate for hotel acquisitions? Nearly 500 hospitality owners, developers, operators and brand executives found answers at the first Midwest Lodging Investors Summit. The three-day event, held July 14-16 at the Sheraton Chicago, featured keynote speakers, panel sessions and lobby discussions on these and many other investment, development, financing and branding topics.
Lodging Hospitality and Penton's Commercial Real Estate Group sponsored MLIS, while The School of Hospitality at Michigan State University served as academic partner.
About a third of MLIS attendees were from Illinois and other Midwest states. More than 20 percent were president, partner, chairman or owner of their companies. More than half of attendees have been in the hospitality industry for 10 years or longer.
As they should, the conference's two luncheon speakers — Strategic Hotels & Resorts CEO Laurence Geller and YPartnership Chairman & CEO Peter Yesawich — provided the keynotes for the event. While approaching the industry from opposite corners, Geller and Yesawich delivered similar messages: the hotel industry is in the midst of a rough patch, but the cycle will eventually reverse and well-positioned companies will weather the storm in good shape.
The ever-blunt Geller, whose Chicago-based company owns 19 upscale and luxury hotels and resorts, told the lunch crowd to “stop whining.
“Sure, things suck now: The airlines are in trouble. Consumer confidence is very low. Construction costs are high, but there's nothing we can do about it. We all need to look forward while we manage the situation as best we can.”
Geller believes 2009 will be a down year for hotels, but “we may see incredible strength in the market by 2010. The good news is the supply situation. Once the hotels currently under construction go online, you'll see very little new development for a while.”
He admonished the crowd not to cut rates during these tough times. However, he believes ADRs at his hotels may contract slightly, “not so much because we're offering discounted rates, but because our mix of business will change during this period.”
Yesawich had a similar message, although it was cloaked in a slick multimedia presentation based on results of his firm's Travel Monitor survey series. Declaring once again, “value is king,” he predicted “travelers will be trading down, but not out of the travel marketplace. There's a lot of demand for travel; it's a question of how you find it.”
Using examples executed by his firm, an Orlando-based hotel advertising and public relations company, Yesawich advocated using creative packaging and promotions to lure travelers to hotels, particularly resort properties.
Another hot button, Yesawich said, is Internet marketing, which he believes has entered “chapter two,” or the era of metasearch and conversational marketing. And, because the Internet creates price transparency, “brand clarity becomes an even more important concern for every hospitality industry marketer.”
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