Hotel & Motel Management - July 7, 2008 - (Page 14) 14 On Finance IN THE details Can the industry rebound? Oil prices have impact Consumer confidence down Election will affect economy H&MM July 7, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Five factors will affect hospitality financing T By James Merkel H&MM Columnist he dog days of summer are upon us and the hotel industry is feeling the heat. Concerns about the economy are taking their toll on consumer confidence, and forecasts indicate the continued instability and lack of liquidity in the capital markets doesn’t bode well for investors looking to get deals done. As summer shifts into high gear, can the industry rebound from this correction cycle, which, so far, has been driven by the capital markets? Or is a more fundamental problem on the horizon? Let’s take a look at five factors I believe will steer the hospitality industry heading into late 2008 and early 2009: 1 The capital markets are staggering. The number of deals being done in the U.S. has dropped dramatically, and the pricing gap between what sellers expect and what buyers are willing to pay remains wide. Price volatility also could become a factor if a recovery in the commercial mortgage-backed securities markets unleashes pent-up trading. It appears we will experience a deeper pause before the market starts to normalize and debt and capital deals start flowing more consistently. oil prices remaining at all-time highs, the lingering effects are trickling down to the development side. Construction costs are taking a direct hit from escalating prices, with the costs of concrete, steel and energy needed to build hotels rising. sumer confidence plunged to its lowest level in 16 years in May, fueled by rising prices, the continued threat of recession, rising inflation and a sour housing market. While consumers were responsible for the post-9/11 recovery, neither businesses nor consumers will be of much help. about tax increases, which tend to be less stimulating to the economy. Businesses likely will sit on the sidelines until after the inauguration, and candidates will continue to drive home the economy’s woes, keeping the issue in front of the voters and adding to their worry. When people and businesses worry, they spend less. Thus far, the industry has been able to somewhat insulate itself, given that fundamentals have been so strong. We’re starting to see indicators, however, that suggest the wave we’ve been riding for the past three years is weakening. A rise in supply, combined with weakening demand, likely will set the industry back on its heels. It’s not a pretty picture right now, but developers who manage their leverage well, provide contingency in their pro forma, understand the risk, choose good real-estate and the right brands and exercise a healthy caution will have a better chance of coming out ahead when the tide turns. It will turn—it’s just going to be a bit painful until it does. hmm@questex.com James T. Merkel is managing director of Columbus-based RockBridge Capital LLC. He can be reached at (614) 246-2505. 2 Effect of oil prices on development. With 3 Demand generators feeling the squeeze. Con- 4 Democrats are talking It’s an election year. 5 Is a more troubling correction on the horizon? CIRCLE NO. 110 http://HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.carrolladams.com http://www.carrolladams.com
Table of Contents Feed for the Digital Edition of Hotel & Motel Management - July 7, 2008 Hotel & Motel Management - July 7, 2008 Contents Brands Target Eastern Markets New Peer Network Promotes Innovation Noble Makes Moves Despite Slow Market Perspective Legally Speaking On Finance AAHOA Update Satisfaction Trends Trends & Stats HotelWorld Update Guest Column 2008 Purchasing Survey Refrigerators Transportation In-Room Ammenities Revenue Management Ad/Editorial Index Marketplace Classifieds Checking Out Hotel & Motel Management - July 7, 2008 Hotel & Motel Management - July 7, 2008 - Hotel & Motel Management - July 7, 2008 (Page 1) Hotel & Motel Management - July 7, 2008 - Hotel & Motel Management - July 7, 2008 (Page 2) Hotel & Motel Management - July 7, 2008 - Contents (Page 3) Hotel & Motel Management - July 7, 2008 - Noble Makes Moves Despite Slow Market (Page 4) Hotel & Motel Management - July 7, 2008 - Noble Makes Moves Despite Slow Market (Page 5) Hotel & Motel Management - July 7, 2008 - Perspective (Page 6) Hotel & Motel Management - July 7, 2008 - Perspective (Page 7) Hotel & Motel Management - July 7, 2008 - Legally Speaking (Page 8) Hotel & Motel Management - July 7, 2008 - Legally Speaking (Page 9) Hotel & Motel Management - July 7, 2008 - Legally Speaking (Page 10) Hotel & Motel Management - July 7, 2008 - Legally Speaking (Page 11) Hotel & Motel Management - July 7, 2008 - Legally Speaking (Page 12) Hotel & Motel Management - July 7, 2008 - Legally Speaking (Page 13) Hotel & Motel Management - July 7, 2008 - On Finance (Page 14) Hotel & Motel Management - July 7, 2008 - On Finance (Page 15) Hotel & Motel Management - July 7, 2008 - AAHOA Update (Page 16) Hotel & Motel Management - July 7, 2008 - Satisfaction Trends (Page 17) Hotel & Motel Management - July 7, 2008 - Trends & Stats (Page 18) Hotel & Motel Management - July 7, 2008 - HotelWorld Update (Page 19) Hotel & Motel Management - July 7, 2008 - Guest Column (Page 20) Hotel & Motel Management - July 7, 2008 - Guest Column (Page 21) Hotel & Motel Management - July 7, 2008 - Guest Column (Page 22) Hotel & Motel Management - July 7, 2008 - Guest Column (Page 23) Hotel & Motel Management - July 7, 2008 - 2008 Purchasing Survey (Page 24) Hotel & Motel Management - July 7, 2008 - 2008 Purchasing Survey (Page 25) Hotel & Motel Management - July 7, 2008 - 2008 Purchasing Survey (Page 26) Hotel & Motel Management - July 7, 2008 - 2008 Purchasing Survey (Page 27) Hotel & Motel Management - July 7, 2008 - Refrigerators (Page 28) Hotel & Motel Management - July 7, 2008 - Refrigerators (Page 29) Hotel & Motel Management - July 7, 2008 - Transportation (Page 30) Hotel & Motel Management - July 7, 2008 - Transportation (Page 31) Hotel & Motel Management - July 7, 2008 - Transportation (Page 32) Hotel & Motel Management - July 7, 2008 - Transportation (Page 33) Hotel & Motel Management - July 7, 2008 - Transportation (Page 34) Hotel & Motel Management - July 7, 2008 - Transportation (Page 35) Hotel & Motel Management - July 7, 2008 - In-Room Ammenities (Page 36) Hotel & Motel Management - July 7, 2008 - In-Room Ammenities (Page 37) Hotel & Motel Management - July 7, 2008 - In-Room Ammenities (Page 38) Hotel & Motel Management - July 7, 2008 - In-Room Ammenities (Page 39) Hotel & Motel Management - July 7, 2008 - In-Room Ammenities (Page 40) Hotel & Motel Management - July 7, 2008 - In-Room Ammenities (Page 41) Hotel & Motel Management - July 7, 2008 - Revenue Management (Page 42) Hotel & Motel Management - July 7, 2008 - Revenue Management (Page 43) Hotel & Motel Management - July 7, 2008 - Ad/Editorial Index (Page 44) Hotel & Motel Management - July 7, 2008 - Ad/Editorial Index (Page 45) Hotel & Motel Management - July 7, 2008 - Ad/Editorial Index (Page 46) Hotel & Motel Management - July 7, 2008 - Ad/Editorial Index (Page 47) Hotel & Motel Management - July 7, 2008 - Marketplace (Page 48) Hotel & Motel Management - July 7, 2008 - Classifieds (Page 49) Hotel & Motel Management - July 7, 2008 - Classifieds (Page 50) Hotel & Motel Management - July 7, 2008 - Classifieds (Page 51) Hotel & Motel Management - July 7, 2008 - Classifieds (Page 52) Hotel & Motel Management - July 7, 2008 - Classifieds (Page 53) Hotel & Motel Management - July 7, 2008 - Checking Out (Page 54) Hotel & Motel Management - July 7, 2008 - Checking Out (Page 55) Hotel & Motel Management - July 7, 2008 - Checking Out (Page 56)
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