Hunter Conference opens in Atlanta

The 21^st Annual Hunter Hotel Investment Conference started here at the Atlanta Marriott Marquis last night, with a gala reception. The program today was highlighted by a look at the economy and what state the lodging industry is in.

Bob Hunter, CEO, Hunter Realty Associates, Inc. and the chairman of the conference, explained that the conference was formed for “Main Street hotel owners” as opposed to Wall Street types. More than 600 attendees were present. And he noted that 34 states, as well as Canada and Mexico, were represented.

Hunter encouraged attendees to focus on the positive, as much as possible.

“I see the glass as half full—as the leader of your company, you must see it that way, also,” said Hunter.

The economy

Panelists and speakers discussed both the positives and negatives of our current economic state. Dr. Rajeev Dhawan, director and associate professor of the Economic Forecasting Center at Georgia State University, said that he wasn’t sure when we would hit bottom.

“Nobody can predict the bottom,” said Dhawan.

But Dhawan was quite certain about the beginning. In 2008, the government bailed out Bear Stearns, but told Lehman Brothers that they would get no bailout. Shortly thereafter, AIG was bailed out.

“That flip flop sent a message … that [the government] is not in charge, they don’t know what they’re doing,” said Dhawan. “The ship sailed after the bankruptcy of Lehman and we still are paying the price. That sent a message to the corporations and everybody: money is not available.”

“The path to greed always leads us astray,” added Nancy Johnson, VP, chief development officer, Carlson Hotels Worldwide. “There was really unrealistic cash flow that people were buying properties on, be it housing or commercial property. … There was no realistic return on investment being provided. The prices kept escalating, and it was like musical chairs. The one that ended up with the property last is the one getting hit now.”

Dhawan said that the current mindset on meetings is a concern of his.

“Right now, they’ve given the banks help, but they them, ‘Don’t you go out and have any conventions, any business meetings or anything,’” he said.

Dhawan said that there is a fear now that any companies that have meetings will be viewed as frivolous.

“That mindset is not going to change overnight,” he said.

Jan Freitag, VP of Smith Travel Research, echoed Dhawan’s concerns, and implored the Obama administration to do something.

“Stop this witch hunt on meetings and conventions,” he said. “Meetings are so important. It’s at meetings where people meet and build trust. Trust is the glue of commerce that drives the economy forward.”

Freitag also warned against the continuing narrowing between group rates and transient rates. Often, group room rates are set far in advance. By the time the meeting gets closer, he said, attendees may be booking cheaper rates through Expedia, instead of getting in the meeting room block. This may lead to questions as to whether the room block was filled and whether penalties should be assessed.

"Those are not discussions you want to happen," he said.

Mark Woodworth, president, PKF Hospitality Research, told attendees that this appeared to be a jobless recovery.

“Our forecasts show a protracted, very drawn-out period until late 2010, maybe even the beginning of 2011 before we see jobs pick back up. It is going to very much mimic the recovery we saw at the beginning of this decade,” he said.

Other panelists agreed with that assessment.

“Absent from some innovation in our economy, I think it’s going to be a bit of a slow go,” said Dennis Quaintance, CEO of Quaintance-Weaver Hotels.

Woodworth noted that history doesn’t always tell the future, but he was confident that the industry would rebound.

“It’s going to get back to good times as in the past, it’s just going to take some time,” Woodworth said.

Yet Quintance said that tough times were merely an opportunity in the cyclical nature of our economy.

“A crisis is a leader’s dream. If you don’t have a fire, set one. Well, this one’s been set for us. I think we can decrease operational expenses and increase our effectiveness in terms of hospitality with good leadership,” said Quintance.