At AAHOA, a focus on guarding investments

the industry issue panel

The Industry Issues Panel Philadelphia – The Asian American Hotel Owners Association Convention is a family affair, indeed. Many of AAHOA’s more than 12,500 members are second- or third-generation hoteliers, and the pride they take in ownership of their hotels is evident. Said Mitch Patel, president and CEO of Vision Hospitality, “If not for the success of the first generation, would we still be doing this?”

Picture: The Industry Issues Panel, from left: Geoff Ballotti, president and CEO, Wyndham Hotel Group; Steve Joyce, president and CEO, Choice Hotels International; Thorsten Kirschke, president, Americas, Carlson Rezidor Hotel Group; David Kong, president and CEO, Best Western International; Rakesh Sarna, EVP, group president – Americas, Hyatt Hotels Corp.; and Tom Corcoran, chairman and founder, FelCor Lodging Trust.  

They still are. This was the 25th anniversary of AAHOA, an organization that began in 1989 to protect and serve the interests of Asian American hotel owners.

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Objectives

AAHOA’s goals are clear, as Mehul Patel, AAHOA chairman, put it. “Our focus is on you and how we can make you money and protect your investment,” he said. 

AAHOA President Fred Schwartz followed up on what Patel outlined. “The marketplace is more complicated, as is the job of owner,” he said. His biggest concern: government interference, which Shwartz called the new battlefield for AAHOA. “Can we make an impact on the political process?” he asked the crowd. “Advocacy is the torch we’ll carry.”

C-Level Says

AAHOA Chairman Mehul Patel outlined the organization’s goals and objectives, which focused on protecting member investments.One of the more compelling sessions at the convention was the “Industry Issues Panel,” which brought together high-level executives from some of the hotel industry’s top branded hotel operators. To get things started, FelCor Lodging Trust Chairman and Founder Tom Corcoran, who moderated the panel, channeled Jack DeBoer, the so-called “father of extended stay,” by sharing with the audience the three rules of franchising, which DeBoer championed: 1) it must make money; 2) it must make money; 3) it must make money.

Most of the panel was optimistic about the year—as most executives were coming out of the Americas Lodging Investment Summit in Los Angeles and the International Hotel Investment Forum in Berlin. “We are saying there are more things that could go right,” said Steve Joyce, president and CEO of Choice Hotels International. “Last year there were government issues. Yes, there are still things out there, but things will build this year and be even better toward the end of the year.”

Picture: AAHOA Chairman Mehul Patel outlined the organization’s goals and objectives, which focused on protecting member investments.

Others, like Thorsten Kirschke, president, Americas, Carlson Rezidor Hotel Group, were of the mindset that the time was now to strike. “Q1 has started strong,” Kirschke said, “with good development and returning group business trends. The question is: for how long? We must make hay while the sun shines.”

While new supply growth has inched along at a rather torpid pace, an uptick is coming, particularly in the midscale segment, where the likes of Best Western International sit. “Last year I was nervous about this year regarding new midscale supply,” said Best Western President and CEO David Kong. “Could our demand growth keep pace? We even put together contingencies. But the year has started out with a bang. New supply is coming in, and we have to be mindful that the easy-getting is over. You can’t just open the door and have people just come in. New supply will siphon off some of that occupancy. So, how do we take market share and optimize revenue?”

Rakesh Sarna, EVP, group president – Americas, Hyatt Hotels Corp., told the audience that rate gain is where the prize is. “We have to get back the margins,” he said.

Pesky OTAs

AAHOA President Fred Schwartz told the audience to be wary of his biggest concern: government interference.It seems that no industry get-together is complete without time allotted for castigating online travel agencies. AAHOA was no different. One of the most ardent denouncers of OTAs is Choice’s Joyce, and he didn’t disappoint. “Hotels gave them cheaper rates. We screwed up, let them in the door and now we are dealing with them,” he said. “They play a role, but are taking too much value out of the equation. They don’t take on the risk. We should work with them so when they add value they get compensated better, less when they aren’t. If we had done our jobs, we wouldn’t have this issue.”

Hyatt’s Sarna agreed that it was up to the hotel industry to wrestle back control of distribution. “Why are [people] going to them?” he asked. “We need to take it back. But we can’t get upset. They are not putting guns to our head to take our business.” 

 

Picture: AAHOA President Fred Schwartz told the audience to be wary of his biggest concern: government interference.

 

➔ by the numbers

EXTENDED STAY
RevPAR exceeds 2007 levels
Extended-stay hotels’ RevPAR exceeded 2007 levels in 70 percent of the 100 largest hotel markets in the U.S. in 2013.

CONSTRUCTION
Extended-stay builds post big numbers
Extended-stay rooms under construction approached 17,000 units in 2013, the highest level since 2009.

SUPPLY
Room supply up
Extended-stay room supply will increase by about 4 percent in 2014, though no growth expected in half of the 100 largest markets.

DECLINES
RevPAR drops in some markets
RevPAR declines in 2013 compared to 2012 were reported in 20 percent of the country’s largest markets.

Source: The Highland Group

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