Despite Economy Downturn, Hoteliers Are Being Resilient

Great Great article from IndiaWest here.

Despite Economy Downturn, Hoteliers Are Being Resilient
By MICHEL W. POTTS
http://www.indiawest.com/readmore.aspx?id=1290&sid=6
July 02, 2009 06:14:00 PM
GARDEN GROVE, Calif. — How the troubled economy has affected hoteliers and what they can do about it was the main topic of discussion June 18 at the annual conference of the Southern California Hotel and Lodging Association co-hosted by the Asian American Hotel Owners Association at the Crowne Plaza hotel here.During the luncheon industry leaders panel discussion, La Quinta chief development officer Rajiv Trivedi noted that “this is a different type of recession that we have experienced in a long time” with the kind of decline that has left the hotel industry in California and Florida the hardest hit. In the last six weeks, however, “from what we see in our brand, the decline has stopped,” he added. “If we compare to 2001, the leisure market started coming back first, and if we have good summer months with the leisure market, I believe we’ll see some better results for our industry starting next year.”Fred Schwartz, president of AAHOA, was more specific. Hoteliers have been enjoying 60 percent occupancy in their hotels for the last 17 out of 20 years. A recent PKF Hospitality Research said that “the 50s are the new 60s, meaning that we’re not going to see 60 percent occupancy probably until 2013,” he told India-West.According to the industry study, the larger, full service hotels, such as the Four Seasons, the Fairmonts, Ritz-Carltons, the Westins and the Sheratons, have been the hardest hit, with some of them being forced into foreclosure.Bhupen Amin, the COO of Lotus Hotels and the current CH&LA chairman until the end of the year, frankly admitted that his properties have experienced a 20 to 25 percent decline since the beginning of the recession. “We’re tightening our belts, we’re working with staff to minimize hours, trying to keep our overhead down and trying to run as efficiently as possible, but it’s tough,” he told India-West. However, according to Schwartz, “there is a silver lining in that there is a lot of pent-up demand, people want to travel, and we hope that what the pundits are saying, that the recession is bottoming out, is true and the travel industry will start to return again and pick up from the poor situation it is now.”AAHOA members “are extremely savvy operators and they have been through downturns before, but this is taking every bit of skill level to manage the downturn and we’re hoping that we’re seeing the bottom of the recession and that travel will regain again,” he added.Trivedi cautioned the hotel operators not to have a “bunker mentality” until the recession has passed. “The Carnegies and the Rockefellers were created only because they were smart enough to take a risk at the time that they took it,” he said.“So look for markets. Look at the other parts of the country where the economy is not going as bad and price value is sustained, where you can build your hotel at 20 to 25 percent less of its value,” Trivedi advised the hoteliers. He also advised them to “extract resources” from their franchisor and “make sure they are providing assistance to retain or gain market share in your area.”There is a light at the end of the tunnel, he told the franchisees. “Have a positive vision,” he urged. “Work with your team and spread the positive vision one person at a time. Focus on what you can do to get better market share and focus on preparing yourself when the upswing comes.”