Many of the speakers at the opening day of the Midwest Lodging Investors Summit, underway this week in Chicago, chose to look on the bright side of the street. While they admit challenges and uncertainties lie ahead, most presenters believe the hotel industry has weathered the worst of the downturn and better times are ahead. Whether that's fact-based analysis or mere wishful thinking will only become clear in the months to come.
The real good news is the intelligent approach many owners, operators and brands have taken to the stressful times. As both Roger Bloss of Vantage Hospitality and David Kong of Best Western told a general session audience, a downturn is the time to focus on sales and marketing, not wanton cost cutting.
“During the recession our response was to go out and sell, sell, sell,” said Bloss, while Kong said Best Western dramatically increased its advertising and marketing budgets to grab market share from its competitors. “Mere cost cutting is no pathway to prosperity.”
Some of the owners and operators speaking on panels had more of a nuts-and-bolts approach to fighting back in the face of tough times. Bill Morrissey of Morrissey Hospitality presented a laundry list of initiatives he uses at his properties to build relationships with his guests and, as he emphasizes, generate incremental revenues. His sound philosophy: Do nothing unless it produces revenues. A smart tactic is all times, but especially when times are tough.
And while many MLIS attendees have moaned about frozen capital markets, Ravi Patel of Hawkeye Hospitality says his firm is still building hotels: six are under construction and nine opened in the past 18 months. His firm uses a mix of USDA guarantees, SBA funding and local tourism guarantees, along with local banking relationships, to find the capital to build.
That's the kind of American hotel ingenuity that will ensure a rebound, probably not soon enough for most hoteliers but nearly a guarantee.