Hotel & Motel Management - January 7, 2008 - (Page 36) 36 Special Report H&MM January 7, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition REAL-ESTATE DEVELOPMENT & INVESTMENT Owners must take long-term look ident of RSBA Associates. Swig said that, despite all the otel owners have been short-term issues, he wanted to benef iciaries of the take a long-term look at ownerboom in recent years. ship. Not surprisingly the subBut with the economy facing un- prime and credit issues are top certain times and spillover from of mind for many, but panelthe credit crunch, how is an own- ists believe its impact will be at er to plan and operate? best minimal, at worst That will be one submanageable. ject under discussion durDexter Wood, senior ing The Americas Lodgv.p., feasibility and straing Investment Summit, tegic analysis for Host held Jan. 28-30 at the Hotels & Resorts, said, Hyatt Regency Centu“I don’t think [the credry Plaza in Los Angeles. it crunch] is necessarily The panel, “Hotel Ownan issue in itself for the ership: The Big Issues, Swig larger real-estate investChallenges and Oppor- RSBA ASSOCIATES ment trusts and hotel tunities. How to Maxcompanies.” imize the Value of Your Assets,” Wood also predicted a rewill be chaired by Rick Swig, pres- newed emphasis on the perenBy Harvey Chipkin CONTRIBUTING EDITOR H nial tension between owner and operator. “The ongoing dynamic between owners and operators is always cost control and profit maximization. When and if it appears as though things are slowing down, there will be give and take between the owners and brands—with the brand trying to be competitive while keeping in mind what’s best for ownership and profitability. It’s a balance of the two.” Commenting on the fact that underlying industry fundamentals seem strong while consumer attitudes are wobbly, Robert Kline, president of Oxford Lodging Group, said, “When you hear operations people say things are fine, that is not necessarily the case when it comes to value, which is Name of panel: “Hotel Ownership: The Big Issues, Challenges and Opportunities. How to Maximize the Value of Your Assets” Time of panel: 3:30-4:45 p.m., Jan. 29 Moderator: Rick Swig, president of RSBA Associates Facilitator: Kevin W. Holt, president, Holt Advisory Group, and founder, intelliMeet Panelists: John A. Griswold, president of Harbor Hotel Investors LLC; Robert D. Kline, president and co-founder of Oxford Lodging Group; Michael S. Kosmas, partner in Squire, Sanders & Dempsey LLC; David A. Sherf, senior v.p., real-estate/asset management/owner relations for Hilton Hotels Corp.; Dexter E. Wood Jr., senior v.p., feasibility and strategic analysis for Host Hotels & Resorts definitely being affected. At this point, you have to focus hard on cash flow and really work hard to maximize operations any place you can look for value.” “What will help owners is better tools at their disposal,” Sherf said. “Many owners are now strong on revenue management, and that’s one reason [why we have] seen such rate Acquisition hiatus Kline gains. That should help It was generally agreed OXFORD LODGING if things weaken.” among panelists that the And, he added, “It is acquisition market has supply that has always at least slowed, with The hurt the industry and Blackstone Group-Hilthat is being curtailed ton Hotels & Resorts as as financial markets cut the last major acquisition down on construction.” for a while. Sherf is not worried Still, said David about a surge of supply. Sherf, senior v.p., real“Go to big cities and estate for Hilton Hotels show me full-service hoSherf Corp., “If it was the right HILTON HOTELS CORP. tels under construction; asset we would be a buythey’re not there,” he er of hotels.” said. Market mix will affect any deLooking ahead cisions. As Wood said, “Some dePanelists said the industry still cisions will depend on the nature is absorbing economic develop- of an individual hotel’s market. If ments of the last few months and it has more transient than group, would make major decisions ear- or more business than leisure dely in 2008. mand—that mix will be part of Kline said that after the first the decision on an approach to quarter, “People will start looking any changes in the marketplace.” back and asking, ‘Is debt available? No matter how sluggish the What kind of debt? How will it economy gets, panelists said ownaffect valuation?’ If the economy ers can’t afford to hold back on does slow, it will be in early April necessary improvements. when owners start to make chang“If you don’t put capital in your es in their operations.” hotels, you will lose out; consumSimilarly, Wood said, “Every- ers want high quality,” Sherf said. one is wondering if we’re looking “If you have a hotel in a secondary at 1999 again as far as the econo- or tertiary market that needs a lot my is concerned. People are anx- of work, it will be a struggle.” ious to see how the fourth quarter While panelists were generaland first quarter numbers come ly upbeat, all agreed that, as Sherf in. Consumer spending has been said, “Everybody has to have a pushing the economy for the last plan on how to operate if the few years—we’ll have to see if that economy does slide.” continues.” hmm@questex.com CIRCLE NO. 164 http://HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.desireshotels.com http://www.desireshotels.com
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