HOUSTON—Third quarter hotel performance was better than expected and fourth quarter is anticipated to be generally positive, according to Vince Ciepiel, senior analyst, Cleveland Research Company. Ciepiel presented the research to support these predictions at the Lodging Conference last week.
He pointed to the need for hotels in the aftermath of Harvey and Irma, which provided a boost to the latter quarters of the year. Specifically, economy and midscale hotels outperformed forecasts in the third quarter because of displaced residents and clean-up crews requiring temporary housing.
Ciepiel also indicated that consumer confidence for hospitality product is at an all-time high especially for leisure travel, while corporate travel is to remain soft for the foreseeable future. He said there are more ups than misses for publicly traded companies.
However, the senior analyst indicated that financing is more difficult and rate growth is lower than other cycles due to Airbnb, consumer perception and other factors. Ciepiel predicted RevPar growth to range from 1 to 2% in 2018.
He also pointed out that the international markets of Asia and Europe are outperforming US hospitality markets.
In another Lodging Conference session, A View from the C-Suite, moderator Glenn Haussman, host of the No Vacancy podcast discussed branding, technological advancements and changing consumer behaviors. These issues provide ways to differentiate hotels and will enhance continued performance in the coming year.
Panelists included Liam Brown, president, franchising, MxM Select Brands, North America, Marriott International; Kevin Frid, COO, North and Central America, AccorHotels; Ken Greene, president, Americas, Carlson Rezidor Hotel Group; Thomas Magnuson, CEO and co-founder, Magnuson Hotels; Michael Medzigian, managing partner, Watermark Capital Partners LLC; Greg Mount, president and CEO, RLH Corporation; and Bhavesh Patel, chairman, AAHOA.
The hotels affected by the hurricanes in Houston and Florida as well as the Northern California fires will obviously need ownership support to return to normal operations, Medzigian mentioned.
Brands and experiential travel dominated the remainder of the discussion. Greene said brands have to be specific, with special care taken to know the customer.
“If you are complacent, you might as well roll up the carpet and go home,” Frid concurred.
Medzigian agreed, adding that hotels can provide experiential travel more so than Airbnb. Magnuson said he finds it amazing that experiential travel is now being discovered and surmises it is because consumers are rejecting standardization. Brown said of course, there must be standardization on cleanliness and friendliness but then followed with layering on experiences. This allows a hotel to bind consumers via loyalty, he said.
“We should surprise and delight,” Mount said. “We give our customers gifts and look at ways to package stays. However, we shouldn't dictate how they want to be treated and how they want to interact.”
HOUSTON—Third quarter hotel performance was better than expected and fourth quarter is anticipated to be generally positive, according to Vince Ciepiel, senior analyst, Cleveland Research Company. Ciepiel presented the research to support these predictions at the Lodging Conference last week.
He pointed to the need for hotels in the aftermath of Harvey and Irma, which provided a boost to the latter quarters of the year. Specifically, economy and midscale hotels outperformed forecasts in the third quarter because of displaced residents and clean-up crews requiring temporary housing.
Ciepiel also indicated that consumer confidence for hospitality product is at an all-time high especially for leisure travel, while corporate travel is to remain soft for the foreseeable future. He said there are more ups than misses for publicly traded companies.
However, the senior analyst indicated that financing is more difficult and rate growth is lower than other cycles due to Airbnb, consumer perception and other factors. Ciepiel predicted RevPar growth to range from 1 to 2% in 2018.
He also pointed out that the international markets of Asia and Europe are outperforming US hospitality markets.
In another Lodging Conference session, A View from the C-Suite, moderator Glenn Haussman, host of the No Vacancy podcast discussed branding, technological advancements and changing consumer behaviors. These issues provide ways to differentiate hotels and will enhance continued performance in the coming year.
Panelists included Liam Brown, president, franchising, MxM Select Brands, North America,
The hotels affected by the hurricanes in Houston and Florida as well as the Northern California fires will obviously need ownership support to return to normal operations, Medzigian mentioned.
Brands and experiential travel dominated the remainder of the discussion. Greene said brands have to be specific, with special care taken to know the customer.
“If you are complacent, you might as well roll up the carpet and go home,” Frid concurred.
Medzigian agreed, adding that hotels can provide experiential travel more so than Airbnb. Magnuson said he finds it amazing that experiential travel is now being discovered and surmises it is because consumers are rejecting standardization. Brown said of course, there must be standardization on cleanliness and friendliness but then followed with layering on experiences. This allows a hotel to bind consumers via loyalty, he said.
“We should surprise and delight,” Mount said. “We give our customers gifts and look at ways to package stays. However, we shouldn't dictate how they want to be treated and how they want to interact.”
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
