Forget what you hear in the major media, the US economy is soaring. And it’s helping boost the entire travel economy too. In fact if you look closely at the numbers the hotel business is doing pretty much better than at any time in history.
Rates are up, occupancy is up, demand has rocketed and supply growth has been in check. So the industry as a whole is in the sweet spot and if you’re company is not making bold moves, then do it. The moment is now; and if you’re a hotel operator or industry supplier you have got to take advantage of what will go down in history as the biggest bull-run ever in the biz. Don’t miss out before the evil specter of the next downturn arrives to spoil all the fun.
At this week’s sold out BITAC Purchasing & Design West, the unwritten underlying theme was confidence. Confidence that even heartier profits are on the way. Confidence that risk taking will result in big payoffs. Confidence that newly forged relationships and partnerships will yield positive results for all involved.
So overall attendees were downright ecstatic about current opportunities and future possibilities.
For those not in the know, BITAC is the industry leading one-on-one meetings and relationship building event. Taking place at the Hotel Del Coronado, the 44th BITAC event attracted the ultimate group of insiders and decision makers representing leading and forward thinking companies. And they’re all here to come together at BITAC to problem solve, network, sign deals and exchange ideas to move forward the quality of experiences for hotel guests, while adding profits to the bottom line. There’s even time to cut loose, be social and network in a luxurious and relaxed environment. The next can’t miss BITAC will be December 8-10 and focus on upper echelon Owners who will come together at The Breakers in Palm Beach, FL.
But here at BITAC Purchasing & Design West, we wanted to really understand what the BITAC brain trust was thinking. So we utilized our advanced real-time polling system to ask the sold out crowd what is on their minds regarding the state of the U.S. economy and the travel economy. We cut through the clutter and got the facts on critical economic and business issues to get the anonymous truth. Turns out people are feeling good. We’d even argue they may be feeling downright giddy.
Here is what attendees were thinking this morning:
How do you feel about the state of the U.S. economy compared to one year ago?
Bullish - 17.9%
It’s good - 63.2%
Neutral – 12%
A little worried - 5.1%
Freaked out – 1.7%
How do you feel about the state of the TRAVEL economy compared to one year ago?
Bullish - 14.6%
It’s good - 66.7%
A little worried – 2.1%
Freaked out – 1.4%
How did the government shutdown affect your business?
Severely - 2.6%
Moderately – 19.6%
We noticed no change – 74.5%
Improved moderately – 2.0%
Improved a lot – 1.3%
What are your thoughts on Congress staving off another shutdown in January?
They will come to agreement before a shutdown happens again - 20.0%
They’ll kick the clichéd can down the road again – 58.1%
Another shutdown is guaranteed – 21.9%
What is your impression regarding the future of U.S. stock markets?
Markets will rise steadily for next year - 73.0%
Markets will rise sharply in next year - 8.0%
Markets will drop moderately in next year - 13.0%
Markets will drop precipitously – 6.0%
What do you think the Federal Reserve will do about interest rates during the next year?
Lower them - 0.9%
Keep them steady at current rates - 49.6%
Raise them a bit – 42.5%
Raise them a lot – 4.4%
I don’t know – 2.7%
How friendly do you see banks regarding hotel loans these days? They are:
Lending to anyone who asks - 1.0%
Lending on most projects to established developers - 38.2%
Scrutinizing and being extremely careful about projects they finance - 58.8%
Not lending to hotel developers in any meaningful way - 2.0%
How do you see the travel consumer mindset?
They are feeling wealth and think its 2006 or 2007 again -2.1%
They feel financially secure but are watching spending -- 88.5%
They are extremely wary of the economy 9.4%
How do you see the future of hotel markets?
Haves and have not spread further apart - 29.1%
Enough people I to go around everywhere - 41.8%
Disparity of markets continues - 29.1%
Is your company planning to add jobs in 2014?
Plan to add many - 12.2%
Plan to add some - 59.3%
We want to, just not sure if we can afford to - 21.1%
We do not plan to add jobs in 2014 -7.3%
In what departments do you plan to do most of your hiring?
Housekeeping, property - 5.3%
Maintenance - 3.5%
Reservations - 8.8%
Sales and marketing - 63.2%
Food & Beverage - 3.5%
We're not planning on any new hires -15.8%
What is your perspective on making business decisions in 2014?
We will make bold moves - 42.6%
We will make small incremental changes -54.3%
We are waiting on decision making until there is more market clarity - 2.1%
We are shrinking violets - 1.1%
Are you personally feeling more economically confident about 2014?
Very much so - 40.4%
Somewhat - 42.2%
Neutral - 10.1%
I’m a bit nervous - 5.5%
I am feeling extremely conservative -1.8%
Are your hotels breaking records on key fundamentals such as ADR & RevPAR?
We are breaking records! - 20.4%
We are close, but not yet - 59.3%
Not happening for us - 14.8%
Our numbers stink - 5.6%
How do you think customers will spend in hotels come 2014?
They will spend freely - 3.1%
They will spend but not like before the Great Recession - 71.1%
They will be conservative in their spending - 25.8%
They’re wallets will be stuck shut - 0.0%
What is your perception of hotel owners’ approach toward raising rates?
Aggressive - 23.1%
Timid - 37.4%
Cautiously Optimistic - 39.6%
How much do you expect to see ADR rise in 2014?
1-2% - 15.3%
3-5% - 71.2%
5-10% - 11.9%
10% or more - 0.0%
None - 1.7%
What is your perspective on making business decisions?
We are making bold moves - 28.6%-
We are making small incremental changes - 71.4%
We are waiting - 0.0%
We are shrinking violets - 0.0%
Are you personally feeling more economically confident when thinking about 2014?
Very much so - 37.0%
Somewhat - 56.2%
I’m a bit nervous - 6.8%
I am feeling extremely conservative - 0.0%
Which hotel segment will be healthiest in 2014?
Luxury - 26.8%
Upper upscale - 19.5%
Upscale - 15.4%
Upper midscale - 23.6%
Midscale - 10.6%
Economy - 0.8%
Independent - 3.3%
Which hotel segment will see the most challenges in 2014?
Upper upscale - 6.7%
Upscale - 4.4%
Upper midscale - 6.7%
Midscale - 13.3%
Economy - 33.3%
Independent - 21.1%
When reinvesting profits in hotels in 2014, where is the top area owners will invest their profits?
Small Scale Renovations - 54.1%
Large Scale Renovations - 28.2%
Marketing - 15.3%
Back Office Technology - 1.2%
New Hires - 1.2%
Training - 0.0%
In what year will the hotel industry peak?
2014 - 2.2%
2015 - 26.1%
2016 - 46.7%
2017 - 20.7%
2018 and beyond - 4.3%