By Ed Watkins

The crucial summer travel season is underway, and most owners and operators should have a fairly clear idea of their prospects of success for the next three months and probably the whole year. It seems like yesterday we were all making New Year’s resolutions, but time compression is a new way of life in which events, trends, problems and solutions speed up to a pace that’s often hard to comprehend let alone cope with. In the lodging industry, for example, a lot has happened (mostly good) since the beginning of the year.

While hotel demand has been on the upswing for more than a year, it’s heartening to see rates slowly climbing back to respectable levels. Most operators are still in a competitive slugfest so it takes a steely resolve for GMs to charge more for rooms unless the competition is also doing so. Still, the laws of supply and demand are usually unstoppable, and if the national and world economies continue to improve, both business and leisure travel will increase. In the meantime, few new hotels are opening (about 400 this year, nearly a record low in the U.S.), creating greater opportunities on every street corner to push rates higher.

Higher occupancies and higher rates, in particular, lead to higher unit-level profits, which is the ultimate driver of hotel values. That fact has become evident by scanning the announcements of hotel transactions for the past couple of months. Some investors, especially those who have cash and don’t need financing, are finding some deals that could be called steals. These are mostly properties that lenders own but are desperate to get rid of, or are owned by entrepreneurs or companies deep under water with their investments, and also desperate.

While construction of new hotels is mostly dormant, except for some isolated street corners across the land and almost exclusively for smaller select-service properties, it’s interesting to note the arrival of several new brands on the lodging landscape. Hotel veteran Steve Belmonte teamed up with Key West Inns to launch Centerstone Hotels, a franchise operation that promises low franchise fees and little meddling from corporate. At the other end of the spectrum, late last month Ian Schrager unveiled Public, a new boutique brand that he claims is a backlash to the current crop of overly designed, overly flashy boutique properties.

While most of the news for the hotel industry this year has been positive, Mother Nature and other factors have put a dent in some of that ebullience. The earthquake and tsunami in Japan will probably have long-lasting effects of travel throughout the Pacific Rim and, of course, to Hawaii. And gasoline prices around $4 a gallon have had a chilling effect on the hospitality business, both because it may inhibit some leisure travel this summer and because higher oil prices translate into higher operating costs. And the heinous (alleged) attack of a housekeeper at a New York hotel by a former head of the IMF has put a harsh spotlight on the hotel industry and its ability to protect its employees and guests. It’s been a long, interesting and mostly positive first half of the year. I wonder what the next six months will bring.

Ed Watkins is editor of Lodging Hospitality. Reach him at ed.watkins@penton.com or 216-931-9278