No matter what the industry prognosticators are saying, it matters most what the owners think. They’re the ones calling the shots. Making the decision to buy, sell or hold properties. Making the decision to build new hotels. Not surprising since ultimately they’re the ones in charge.
The good news is the economy is soaring, both in and out of the hotel industry. Most industry fundamentals are at or higher than peak levels and the general economy is seeing record high stock market valuations while large type sale items such as homes and cars are doing very well. Plus, more things are being made in America than in a generation.
However, we know mood has the ability to outsmart even the cleverest individuals. A negative state of mind severely affects decision making in business. That makes sense of course, it takes guts to make big risks. And when money is on the line sometimes people can be so cautious it prevents them from seeing opportunity.
The media has been so prevalent in hampering the American psychology we wanted to see if there is an unnecessary pessimism in the hotel industry. Even with such amazing numbers being seen at hotels across the country and an incredibly bright few years ahead, is the media’s overall negative influence bumming out the industry’s leaders?
That made us curious, so at this week’s BITAC Owners we went straight to the source. We utilized our advanced real-time polling system to ask the room’s brain trust what’s on their minds regarding the economy, the prospect of future prosperity, current business drivers and other critical profit making trends.
For those not in the know, BITAC is the industry leading one-on-one meetings and relationship building event. This week marks the 45th BITAC meeting, which is being held at the iconic Breakers hotel and the 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.
Here is what BITAC Owners attendees were thinking this week:
How do you feel about the state of the U.S. economy compared to one year ago?
It’s good - 61.0%
Neutral - 22.0%
A little worried - 3.4%
Freaked out - 0.0%
How do you feel about the state of the TRAVEL economy compared to one year ago?
Bullish - 17.9%
It’s good - 74.6%
Neutral - 7.5%
A little worried - 0.0%
Freaked out - 0.0%
What is your impression regarding the future of U.S. stock markets?
Markets will rise steadily for next year - 26.4%
Markets will rise sharply in next year - 1.9%
Markets will drop moderately in next year -62.3%
Markets will drop precipitously - 9.4%
What do you think the Federal Reserve will do about interest rates during the next year?
Lower them - 0.0%
Keep them steady at current rates - 27.4%
Raise them a bit - 67.1%
Raise them a lot - 4.1%
I don’t know - 1.4%
How do you see the future of hotel markets?
Haves and have not spread further apart - 22.6%
Enough people I to go around everywhere - 45.2%
Disparity of markets continues - 32.3%
Is your company planning to add jobs in 2014?
Plan to add many - 20.5%
Plan to add some - 61.6%
We want to, just not sure if we can afford to - 9.6%
We do not plan to add jobs in 2014 - 8.2%
In what departments do you plan to do most of your hiring?
Housekeeping, property maintenance - 26.3%
Reservations - 8.8%
Sales and marketing - 54.4%
Food & Beverage - 1.8%
We're not planning on any new hires - 8.8%
What is your perspective on making business decisions in 2014?
We will make bold moves - 60.8%
We will make small incremental changes - 37.3%
We are waiting on decision making until there is more market clarity - 2.0%
We are shrinking violets - 0.0%
Are you personally feeling more economically confident about 2014?
Very much so - 39.1%
Somewhat - 34.4%
Neutral - 12.5%
I’m a bit nervous - 10.9%
I am feeling extremely conservative - 3.1%
What is your perception of hotel owners’ approach toward raising rates?
Aggressive - 28.8%
Timid - 28.8%
Cautiously Optimistic - 42.3%
How much do you expect to see ADR rise in 2014?
10% - 26.5%
10% or more - 4.1%
None - 2.0%
When reinvesting profits in hotels in 2014, where is the top area owners will invest their profits?
Small Scale Renovations - 29.0%
Large Scale Renovations - 32.3%
Marketing - 29.0%
Back Office Technology - 9.7%
New Hires - 0.0%
In what year will the hotel industry peak?
2014 - 6.3%
2015 - 15.6%
2016 - 32.8%
2017 - 35.9%
2018 and beyond - 9.4%