Hotel & Motel Management - October 1, 2007 - (Page 43)

www.HotelMotel.com/digital_edition HotelMotel.com | H&MM October 1, 2007 News 43 Costs Continued from page 1 “It will serve to put the brakes on some of the supply growth,” Smith said during the ﬁfth annual Memphis Lodging Industry Summit in mid-August. Broken down by industry segment, construction-time growth is dramatic: Midscale without food and beverage: 18.2 months in 2006; strong,” said Rick Kelleher, principal and c.e.o. of Boston-based Pyramid Advisors, which owns and/ or operates about 36 hotels comprising nearly 13,000 guestrooms. “There is good corporate travel in major markets.” Dan Fay, founder and president of Commonwealth Hotels, said major corporations are starting to scale back travel. Commonwealth Hotels, based in Covington, Ky., owns and/ or manages 18 hotels comprising more than 3,200 guestrooms. It has 10 hotels in development. Larry Silver, president and c.e.o. of Silver Cos., said consumers still are looking for the new hotel product that differentiates from the other brands. “The new executive who is traveling is going to demand a little more, but will also pay a little more,” he said. Silver Cos. is a real-estate development and investment company that has specialized in the residen- tial sector but has turned its attention to the lodging industry, including building a four-hotel village development at Celebrate Virginia near Fredricksburg, Va., and several Hyatt Place hotels. Labor issues also were a prime topic of conversation, and Kelleher was the most outspoken. “The No. 1 concern I have for the industry is the labor market,” Kelleher said. “Every hotel company in the world that I know of has undocumented workers or partial- ly documented workers.” He said the potential change in the no-match letters from the Social Security Administration— the government wants employers to take responsibility of undocumented or partially documented employees rather than the employees—would have a dramatic effect on the lodging industry. “It’s the single most important issue operators will face in the next 18 months,” he said. jhigley@questex.com 11.9 months in 2000 Luxury: 29 months in 2006; 17.9 months in 2000 Upper upscale: 23.3 months in 2006; 17.4 months in 2000 Upscale: 18.3 months in 2006; 13.3 months in 2000. Midscale with food and beverage: 24.8 months in 2006; 10.9 months in 2000. Stephen Perkins, principal with architecture and design ﬁrm ForrestPerkins, said the approvals process is getting extremely long and rising construction costs still are common. Year-to-date construction costs have grown 3.8 percent in 2007. As for speciﬁc material, concrete is up 8 percent and steel is up 5 percent; however, the cost of lumber has decreased 12 percent. Smith said the credit crunch involving subprime lenders could also affect supply. “It could help slow construction now and demand growth later,” he said. Those topics didn’t escape the attention of the presidents’ panel, which was moderated by Isaac Collazo, v.p. of performance strategy & planning for InterContinenal Hotels Group. Bob Alter, chairman of Sunstone Hotels, a southern California-based company with 47 hotels comprising about 16,500 guestrooms, said the construction pipeline looks solid for the near future. He said the current credit crunch could affect marginal companies, but the big brands won’t feel any pinch. “That supply market has never been built by Wall Street,” Alter said. “That pipeline will go on for the next few years.” Alter said he is conﬁdent his company can have 4 percent to 5 percent revenue-per-availableroom growth. Others on the panel talked about the travel environment. “Business travel has been CIRCLE NO. 126 http://www.HotelMotel.com/digital_edition http://HotelMotel.com http://www.inncom.com http://www.inncom.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - October 1, 2007

Hotel & Motel Management - October 1, 2007 Contents Independents Rely on Guest Feedback Models Showcase Aloft, Element Brands Trainers Emphasize Communication, Cooperation Perspective At Your Risk Satisfaction Trends Sales Clinic Energy Star Update HotelWorld Update Trends & Stats Dressing Walls in 'Green' Music Programming Provides a Sound Solution Remote Check-In/Out for Leisure Travelers Q&A: Western U.S. Pipeline Softgoods - Beds and Bedding Transactions A Cause Célèbre Awards People on the Move Events Cleaning and Maintenance Solutions Marketplace Ad/Editorial Index Classifieds Checking Out

Hotel & Motel Management - October 1, 2007

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