LOS ANGELES—The hotel industry took another step toward “normal” this week as the 2022 Americas Lodging Investment Summit opened at the JW Marriott/Ritz-Carlton Los Angeles L.A. Live—albeit a “new normal” with continued mask wearing, proof of vaccination and/or a negative COVID test.
Registrants for ALIS and sister event ALIS Law totaled 1,900.
The opening general session kicked off with “The Numbers—What to Expect in 2022 and Beyond,” which featured Carter Wilson, SVP, consulting and analytics at STR; Cindy Estis Green, CEO and co-founder of Kalibri Labs; and Michael Grove, COO of HotStats.
“Despite a little bit of a slow start, despite some short-term concerns about omicron and some longer-term concerns about inflation and labor supply, we believe 2022 is going to be a pretty strong recovery,” Wilson said. “In fact, our forecast right here isn't markedly different than what we put out in November. We're still seeing nominal [average daily rate] being totally recovered by the end of this year, and the [revenue per available room] being recovered to its 2019 levels next year.”
According to Green, rural, interstate, small city and town properties are relatively close to 2019 RevPAR levels, but that’s not the story for everyone.
“When we look at the averages, what drags everything down tends to be the top 50 markets followed by markets 51 to 100,” she said. “And for those last year, we only were two-thirds of 2019 levels and for ’22 we're anticipating really to get between 70 and 80 percent and that will bring you down the overall average.”
Grove touched on expenses, which have been affected by large increases due to the supply and demand issue in the labor market. “It's not just competing between hoteliers, but actually competing against across industries for the right talent. And so actually, we've seen such a repositioning of the back-of-house areas, the areas of sales and marketing, property maintenance, hotels are having to reposition themselves in a much different way.”
Grove said that zero based budgeting will be here to stay for a while and that certain costs will be offset by other parts of the business. “I think, as we have uncertainty in the market, that will continue. We will also, of course, see costs that we've had in the last few years, the increase in digital space, etc., being offset by the the other parts of the business.
“We need to be able to position things differently and I think the collaboration between operators and owners, the ability to centralize and cluster, has also evolved a lot over the last few years,” he added. “This are reflected in these numbers.”
Lifetime Achievement Award
Also on the first day, John Belden, executive chairman of Davidson Hotel Group, presented the ALIS Lifetime Achievement Award to Michael Shannon, chairman of KSL Capital Partners. Belden called Shannon “one of the most impactful hospitality leaders of our generation” and said he set the bar high for future recipients of the award.
Shannon started his career as a banker in media and entertainment, and through “good fortune” became president and CEO of Vail Associates at age 27, overseeing the company’s ski resorts in Colorado. He went on to co-found KSL Recreation Corp. and KSL Capital Partners.
Shannon attributes his success both to curiosity and his inexperience at the start of his career.
“I like to say that a stranger is a friend you haven't met yet,” Shannon said, noting that he was "young enough and inexperienced enough" to ask people for help, and his mentors helped him find the answers he needed to grow. “[I] just kind of took the best from each of these different mentors and tried to roll it into something that really gave the customer some excitement and joy.”
He said he was lucky to get a job at 27 that he wasn’t qualified to do and was in a beautiful setting, and he’s tried to make the most of it.
“Most of us in life, if we’re lucky enough to combine our avocation—what we love to do—with what we do [as a job], that’s sort of Nirvana,” he said. “Combining avocation with vocation and then to do it in a small town like Vail, Colo., where you can grow with your family and now my grandchildren and not fight the rat race I used to fight in downtown Chicago and other places. I’m just incredibly grateful.”