At ALIS, a settled, rosier mood prevailed

At ALIS, a settled, rosier mood prevailed

Arne Sorenson, CEO of Marriott International, was one of three hotel CEOs to take the stage at the Nokia Theatre during the opening session of ALIS.Los Angeles – The tagline at this year’s Americas Lodging Investment Summit at L.A. Live was “Going Up?”, the question mark denoting ambivalence the hotel community still harbored. Turns out, the tagline belied the truth: the hotel industry is healthy and set up for a heady 2014.

Look no further than this year’s attendance: ALIS attracted the second-highest number of attendees since a record 2008. Need more proof of a rosy return: local L.A. choir Angel City Chorale belted out a gospel rendition of “Happy Days are Here Again.”

Wake up the doldrums, indeed.

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Picture: Arne Sorenson, CEO of Marriott International, was one of three hotel CEOs to take the stage at the Nokia Theatre during the opening session of ALIS.

NEXT-GEN TRAVELERS

This year’s opening session was different, as CEOs from three top hotel companies each delivered 10-minute presentations on issues most prevalent in hotels and travel today.

Arne Sorenson, CEO of Marriott International, talked about next-generation customers—and it all centered around a girl named “Jia,” a fictional traveler, described thusly by Sorenson: “ She wants a hotel that lets her be Jia. She wants to control her own experience and wants a brand that won’t get in her way. She expects fast Wi-Fi and a bar with a spark. A tweet-worthy experience. One she’ll share with her friends.”

He closed by saying that global companies face daily tests. “Jia is the customer we want and she will be won over if we deliver value and are eager to grow and change right by her side.”

BRINGING the WORLD TO AMERICA

While Sorenson focused on the next-gen traveler, Chris Nassetta, CEO of Hilton Worldwide, had a message about ensuring that global travelers could make it here to the U.S. without undo duress. Namely, the need to address visa issues.

“We want to bring the world to America,” he said. “But there remain long wait times for visas, expenses and a complicated bureaucracy. This is a problem and it is limiting results of getting people here.”

Nassetta said it can be reversed by: supporting better marketing, reducing visa wait times, expanding the visa waiver program, modernizing how visas are issued and making customs more welcoming.

LIVING IN A MOBILE WORLD

No discussion about the hotel industry is complete today without the mention of digital and mobile technology. That was covered by Frits van Paasschen, CEO of Starwood Hotels & Resorts Worldwide.

“We are living in a time of unprecedented change,” he said. “And when we say ‘tech’ we mean ‘mobile.’ I don’t even have a laptop anymore. My office is where I have Wi-Fi and my iPad.”

He added, “The hotel business is old, and we didn’t come of age with technology, so we need to understand how it works and influences guests.”

THE NUMBERS

An early morning session, “Numbers, Numbers and More Numbers,” featured a trinity of prognosticators from PKF Hospitality Research, STR and HVS.

“2013 was a really good year for the U.S.,” said STR’s Jan Freitag. “I heard a lot of awesome. You sold more rooms than ever.”Chris Nassetta, CEO of Hilton Worldwide, discussed the need for the U.S. to revisit and revise its visa process.

For 2014, Freitag said there were five takeaways: 1) global demand is strong; 2) RevPAR growth slows to plus-5.3 percent; 3) high-end scales continue to outperform; 4) group demand and ADR growth still choppy; 5) supply growth accelerates.

Picture: Chris Nassetta, CEO of Hilton Worldwide, discussed the need for the U.S. to revisit and revise its visa process.

In 2013, STR predicted RevPAR to grow 5.7 percent, when in actuality it grew a not-far-off 5.4 percent.

Supply grew .7 percent in 2013, but is expected to increase 1.2 percent in 2013, STR predicted. “Supply is very understood,” he said. “Construction is heating up.” Meanwhile, ADR will continue to grow at the same level as 2013—around 4.2 percent in 2014. Most don’t see supply upsetting the balance until around 2016.

While STR’s RevPAR forecast was positive for 2014, PKF was much more bullish. PKF is forecasting RevPAR to grow 6.6 percent in 2014, well above its 5.4-percent forecast for 2013.

“Demand has fully recovered,” said PKF’s Mark Woodworth. “We ended the year above the long-run average. Occupancy has now increased four years in a row. 2014 will be a record fifth.”

HVS’ Suzanne Mellen called 2013 a banner year. “Transaction volume reached $25 billion,” she said, adding that number was still below the prior peak of 2006. The average price per key was around $140,000 and hotel sales above $10 million increased 44.6 percent, she said.

Also last year, Mellen said the biggest buyers were private investors, though 2014 will see a wider array of buyers. “The outlook is for another strong transaction year attracting sellers due to high pricing,” she said. “Debt availability will continue.” 

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