Hotel & Motel Management - November 3, 2008 - (Page 63)

www.HotelMotel.com/digital_edition HotelMotel.com | H&MM November 3, 2008 News 63 home the issue of oversight, saying banks will be regulated in how they move forward with loans. But who will oversee the loans and how lending will change is unclear. “This legislation has to walk a tightrope between doing too much and not doing enough to get things restarted,” Simonson said. Tan said regulation of bankers is an important issue. “There has got to be changes, but that’s going to take some time,” he said. “Regulation of banks is so fragmented.” This current ﬁnancial situation, although much more signiﬁcant, can be compared to other ﬁnancial meltdowns in the past. At the end of the day, this isn’t the ﬁrst economic downturn that was driven by excesses of a previous cycle. “We are human and memories are short,” Merkel said. “To say we’re not going to have cycles is to say we’re not going to have a cap- italistic society. I hope what happens is that our elected ofﬁcials are thoughtful and they let the markets work.” Simonson said eventually the act will make capital much more available to AAA-rated borrowers, but that investment-graded borrowers may not have an easier time ﬁnding money. “I expect to still see remaining lenders be more cautious,” he said. For developers who have had trouble accessing debt, how will they know when banks are lending again? “We go back to the banks where we have relationships and get a feel of what their view is and when they’ll be back to lending,” Tan said. Laila Rach, associate dean at the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, said it goes back to customers having a relationship with their lenders. She said in this case it’s especially important to talk to lenders and understand how things are changing on a nearterm basis. “If I know right now there are terms that are so onerous the deal won’t work, I’m going to get as close to my funding agency as I can,” she said. “When the credit begins to ﬂow again, I want to be in on it.” Consumer and business conﬁdence Another key purpose of the stabilization act was to instill conﬁdence in businesses and consumers so the economy rebounds and it becomes OK to spend money again. This would have a direct impact on demand in the hotel industry, which has been sliding since January and took a tumble over the summer. Tan said conﬁdence should start from the business side before the consumer side. “I look at it this way: If normal credit ﬂows back again, businesses can hire people again,” he said. “Unemployment rates come down and jobs are created. It’s hard to have conﬁdence if people don’t have a job.” Rach and her team at NYU, including new clinical associate professor of hospitality and tourism management Bjorn Hanson, who recently joined the faculty after many years with PricewaterhouseCoopers, are not sold on the effects of the bill. Rach said so many aspects of the act are unclear that a timeline for any turnaround of conﬁdence from a consumer’s perspective is unknown. “What has begun to happen is we see businesses failing—the ﬁnancial industry, the automobile industry,” she said. “Banks alone are supposed to be solid, unmoving. All of a sudden people are say- ing we should take our money out of the banks. “The act is designed to make us feel the government is doing positive things to right the ship, but the act has been passed and that’s all.” Hanson admittedly is even less optimistic. He has outlined six groups of travelers the hospitality industry has relied on to help rebound from previous downturns—consumers, businesses, groups, the wealthy, international travelers and contract business— and ruled out each of those groups as catalysts this time around. “Whether we’re in a recession or not, clearly we’re in a recessionary environment,” Hanson said. “We don’t really have a savior this time. We don’t have a sector that’s likely to cause a turnaround. It’s more likely to be the traditional recovery, led by business travel, which always lags.” jfreed@questex.com Admit It. You’ve Never Needed Us More. With prices rising and revenues slowing, purchasers everywhere are scrambling for a better way to control expenditures and manage their purchasing processes. That’s what BuyE cient gives you. A nationwide network of major suppliers you will de nitely recognize. A negotiated pricing structure that leverages the combined buying power of our members. And an online purchasing management system that allows you to track, budget, and control procurement in every facet of your operation. If you need greater control, you need BuyE cient. It’s that simple. So admit it—you’ve never needed us more. Visit our website at buye cient.com or email sales@buye cient.com. We’ll show you how to take control of all your purchasing with a brief online demonstration. 903 CALLE AMANECER | SUITE 100 SAN CLEMENTE, CALIFORNIA 92673 | BUYEFFICIENT.COM CIRCLE NO. 114 CIRCLE NO. 109 http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.architecturalbrass.com http://www.architecturalbrass.com http://www.BUYEFFICIENT.COM http://www.architecturalbrass.com http://www.BUYEFFICIENT.COM

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - November 3, 2008

Hotel & Motel Management - November 3, 2008 Contents The Rate Debate Accor Defines Motel 6 Prototype Rollout Holiday Inn Eyes Upscale, Timeshare Perspective Economy Sets Tone at The Lodging Conference Mellow Vibe Meets Bold Design at HD Boutique Expo IH/M&RS to Focus on Going Green Legally Speaking Sales Clinic On Finance Travel Trends Cornell Insights Franchise Law HotelWorld Update Trends & Stats Energy Star Update Energy Star Update An Industry Connected People on The Move Annual GM Survey Point-of-Sale Systems IH/M&RS Product Preview Outdoor Lighting Refrigeration Marketplace Ad/Editorial Index Classifieds Checking Out

Hotel & Motel Management - November 3, 2008

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