More than 3,000 hotel owners, managers, developers, consultants, financiers, and other stakeholders gathered for the annual Americas Lodging Investment Summit on January 23-25 to share thoughts on important trends and opportunities in the year ahead. The conference, held at the JW Marriott & Microsoft Theater in Los Angeles, California, offered insights into the future of the U.S. hospitality industry.
Here are a few key takeaways.
1. Market Forecast
Overall, 2017 looks pretty good. Although supply growth should slightly exceed demand growth, which would send occupancy levels down a bit, RevPAR is still expected to grow at 2.5%.
The executives I heard from projected RevPAR to increase at “4% or more.” These expectations exclude the New York, Miami, and Houston markets, which have a larger supply/demand imbalance.
Experts generally agreed that there would be more hotel asset transactions in 2017 than there were in 2016 – but there will be fewer mega-deals such as Marriott International’s $13.6 billion acquisition of Starwood Hotels. Hotel valuations in 2017 will be affected by higher cap rates, but increasing NOIs will act as a positive buffer.
3. New President
Whether you’re a supporter or a critic, there’s no denying Trump is having a global impact in all aspects. Perhaps the largest takeaway from ALIS is that owners and developers see the Trump administration as having an understanding of and loyalty to the hotel business, which bodes well for the hospitality industry and overall business environment.
4. Soft Brands
Hilton announced the Tapestry Collection, an upscale category of soft brand hotels. The consensus at ALIS was that growth in soft brands is likely to continue.
Soft brands offer developers a conversion option to enter a market or work with a hotel franchisor that otherwise might not be available.
5. Other ALIS Observations
The above takeaways were by no means the only topics discussed. Here are a few other industry trends I noted at the conference:
- Expected growth in wellness offerings
- Hotel company consolidations
- Technology in hotels (including keyless entry and faster broadband)
- Shrinking rooms, larger communal areas where guests can be ‘alone’ while surrounded by people
Overall, the ALIS conference gave attendees a much-needed dose of confidence as we look ahead to the coming year. Hoteliers and stakeholders alike gained a firmer understanding of the current threats and new potential facing the hospitality industry.