HB ON THE SCENE: Execs Weigh in on a Potential Downturn, Industry Repercussions

PHOENIX—On the second day of The Lodging Conference, held here at the JW Marriott Desert Ridge Resort & Spa, industry leaders confronted concerns about the economic downturn. The panelists were faced with the possibility that the downturn is here, and if it is, what does that mean for the industry?

“It doesn’t really matter,” said Jim Merkel, president, Rockbridge. “At the end of the day, it’s business, and we deal with the challenges that face us.”

Jagruti Panwala, chairwoman of AAHOA, president/CEO of Wealth Protection Strategies Inc., said that as a hotel owner, downturns are inevitable, making it best to prepare for the future. “It could be a high impact even if it’s a small downturn,” she said, but noted that now, there are considerations that weren’t part of the mix 10 years ago.

“It’s not ‘let’s purchase this asset and run with it.’ Everything’s changed—the rules, industry disruptors, consolidation,” she said.

Consolidation was on the mind of all panelists, who discussed its pros and cons and how its changed the economic landscape.

“Consolidation is happening across the industry,” said Justin Knight, president/CEO, Apple Hospitality REIT Inc. “The length of this cycle has facilitated mergers, and groups have looked for creative ways to move the needle. M&A is one of those ways. It means there’s a few very large players that carry a lot of weight.”

Joel Eisemann, chief development officer, the Americas, IHG, said that consolidation presents a host of opportunities. “A lot of times the larger you get, the greater ability you have to invest in technology,” he said.

Ken Greene, president, Americas, Radisson Hotel Group, warned that while consolidation gives options—especially with an uncertain economic climate—brands can’t lose sight of their unique cultures.

“You can’t lose your personality and connection to your customer base, and that’s difficult to do when you get to a certain scale,” Greene said. “The only known is that there will be unknowns.”