Hotel Management asked Ed James, principal at hotel brokerage firm Mumford Company, what his predictions and expectations were for the hotel industry going into 2015. As a brokerage, Mumford is looking to expand its reach and increase productivity in 2015.
Hotel Management: How will the hotel industry fare in 2015 in terms of overall operating metrics and profits?
Ed James: For 2015, we see a continuation of the modest, yet steady, improvement in property level operating results realized in the last few years. Occupancy, ADR and RevPAR should continue to march forward on a relatively consistent path as industry fundamentals remain strong and new supply additions remain modest. Acquisition funding for hotels will remain readily available through 2015 as well, further enabling the transaction flow.
HM: What specific or significant goals have you set for your company in 2015?
EJ: Our goal has always been to provide superior brokerage services to the hospitality community and that will not change in 2015. We are, however, trying to increase our productivity and expand our marketing reach through the use of technology and social media.
HM: What challenges—within the industry or within the world at large—have the possibility to upset the current general optimism within the industry?
EJ: A myriad of geopolitical threats consistently threaten our recovery in the U.S. Terrorism and health scares such as Ebola are at the top of the list today but others pose threats as well. Around the globe, weaker economies in the Eurozone and slowed growth in India and China are causes for concern. However, history has shown we can recover quickly in the U.S.
HM: In 2015, where are you concentrating your company’s growth and expansion?
EJ: We plan to continue to grow our sales force nationally in 2015. As our transaction volume increases through the year, we will be looking at new markets where we could benefit from additional local or regional representation. Targets for expansion may include the Northeast, Midwest and Southwest United States.
HM: What areas within the hotel industry will deserve the most attention in 2015 that may not be on our radar now? For example: Labor issues, government/economic issues, etc.
EJ: New supply additions have been low in recent years and our industry has recovered faster as a result. New building starts are now rising and we need to keep a watchful eye on overbuilding in both large and small markets. On the ownership and management side, growth will come now through rate vs. previous recovery in occupancy. Effective revenue management on the property level is a must!