Predicting the ALIS outcome

The money makers are coming to L.A. Descending upon the city for a two-day swarm of activity, many of the most influential lodging executives are getting set for one of the tentpole events of the lodging financial community, ALIS. 

Expect a beehive of activity, frothing over with plenty of deal making and future strategizing. And as usual, there’ll be the typical chatter on when the good times will end and succumb to a downward market. 

I’ve been hearing this talk consistently for years. For many, doomsday is always about to happen. Part sport, part fear, the naysayers have been consistently more negative than Ben Solo has daddy issues. But this time, the crabby contingent may be onto something. 

That being said, my hunch is attendees will be feeling pretty good about themselves. They’ll be plenty of back slapping, champagne toasts and the opportunity to make magic happen. Plus a few people will wage a losing battle against the lobby bar (that’s the surest of all predictions).

The wisest ones, however, are starting to think about placing their bets on the ‘don’t pass’ line. They’re sensing a disturbance in the force, and are thinking about what comes next. There’s good reason for people to start being afraid, although industry fundamentals point to more amazing times in the short run.  

I may be a sideline observer, but with no action on the table myself (or the wealth that accompanies it) I don’t have emotional bias clouding my judgment. In fact, I’m starting to feel some awfully bad mojo regarding just how long the good times are going to last. I don’t want get too negative, and I certainly believe 2016 is going to be a powerful one for the lodging industry. But I’m thinking we’re heading into the swan song for the good times.   

The industry has been breaking records for so long, the inevitable has to happen soon enough. I’m no Nostradamus, or should I say Yoda, but we all know this is a cyclical business and that peak is looming large.  

Plus, the global economy doesn’t seem to be playing nice. Extenuating factors beyond our control may bleed into the incredible dynamics we’ve been seeing for years.  Stock market woes, plus a weakening of global growth we see through the prism of a glut of oil and slow boiling panic over potential terror threats. These things are a total bummer and tend to put people in a negative mindset resulting in knee jerk reactions to circle the financial wagons by cutting spending. 

Back in 2010 I was proselytizing the opposite by declaring the industry recession over, and repeatedly writing in columns and shouting from convention stages that tomorrow’s heroes are the ones making bold moves today.   

Now, we’re on the other end of the cycle and the same can be said again. Those escaping the deleterious effects of the next trough are thinking wisely about preparing a downturn strategy. They’re going to take risks and make moves by leveraging strong balance sheets and incredibly high valuations.  

The smartest ones will be keenly focused on what comes next. So the question becomes, what’s your next move going to be?

Think I’m right on or off my rocker? Send me your thoughts and let’s find a consensus.