The Hotel Times - September 2008 - (Page 1)

BUSINESS OUTLOOK » BY STACY SILVER Take action, not cover Take advantage of turbulence TOP international markets at the start of the second quarter in terms of number of projects N o matter where you look, there isn’t much positive business news out there. The credit crunch has not abated and gas prices remain high—but thankfully are declining. Consumers are nervous about the future and therefore inclined to spend less. Some could argue that a prudent hotelier should take cover and wait it out. I disagree. Instead, this is the time for good hoteliers to take action. Revenue per available room was up only slightly in the second quarter—but it was up. Stronger hotels gained market share. Smarter hoteliers found new customers or created new ways to offset high fuel costs with such creative concepts as “stay-cations.” And if you’re not marketing to European guests who view the U.S. as the bargain of the century, then you’re missing the boat. The point is this: Every phase of the hotel real estate cycle creates opportunities for those who want to seize them. Here are several ways to take advantage of these turbulent times: If your occupancy is a little soft, why not take care of some renovation projects? You’ll disrupt fewer guests, and you’ll displace fewer room nights. In the process, you’ll make your hotel more competitive not only for this year, but for when the inevitable upswing in the economy occurs. With so much uncertainty, a lot of hotel managers are concerned about their jobs, not to mention future personal growth potential. This situation creates a great opportunity to cherry-pick some of the top talent in the industry. By adding better associates, you’ll get immediate short-term improvements and be even stronger to slingshot ahead of your competitors during the rebound. With a relatively ﬂat business environment, your hotels likely are not running at full speed. Why not use this new found time to train your staff? Bettertrained associates provide better service to your guests and produce a more efﬁcient operation. As far as development goes, maybe it is time you looked beyond your current markets. There is an explosion of hotel development around the globe. According to Lodging Econometrics, the top international markets at the start of the second quarter in terms of number of projects are Dubai (162 projects), Shanghai (124 projects), Beijing (119 projects), London (75 projects) and Abu Dhabi (73 projects). Somebody has to develop and manage these properties. Why not you? This is also the time to plan how you will take advantage of the next up-cycle. If you wait until it begins, you’ll be behind and spend valuable time playing catchup. Take advantage of everything this phase of the cycle offers. It will make you a better and more proﬁtable hotelier. Dubai 162 projects Shanghai 124 projects ssilver@questex.com Business development director Beijing 119 projects Source: Lodging Econometrics www.TheHotelTimes.com September 2008 The Hotel Times 1 http://www.TheHotelTimes.com

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The Hotel Times - September 2008 Business Outlook Editorial Outlook Contents In The News Transactional Facts Hurry Up and Wait Capital Outlook Development Outlook Brokerage Outlook International Litigation: Who gets sued? Insurance Outlook Economic Crisis: Stress or Opportunity for Franchisees? Franchise Outlook Ad/Edit Index In Closing

The Hotel Times - September 2008

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