EDITORIAL ADVISORY BOARD
Managing Director & CEO, Americas
Jones Lang LaSalle Hotels
A Quarterly Supplement
SVP, Franchise Development
InterContinental Hotels Group
Sumner A. Baye
International Hotel Network LLC
Maintain Market Share, Say Hoteliers
In a slumping economy, it is probably more important to maintain market share
and generate demand than lifting average daily rates. That was one of the opinions
expressed by participants in a panel held during this month’s International Hotel/
Motel & Restaurant Show in New York City.
The session, “The Importance of Investing in Your Assets During a Downturn,”
focused on strategies hoteliers can employ to survive this rough patch in the economy. Michael George, president and CEO of Crescent Hotels & Resorts, stated that
“rates have already fallen.” In some instances, contract rates have been re-bid and prices have been adjusted in an attempt to preserve a property’s customer base, he said.
Safeguarding a hotel’s penetration within a particular marketplace is paramount
in today’s environment, stated Robert J. Habeeb, president of First Hospitality
Group Inc. “Consumers are discriminating in a downturn,” he said.
Besides, as Dave Sibley, president and CEO of the hospitality management division of White Lodging Services, noted, rates are unlikely to increase next year and,
therefore, it’s more important to keep up market share.
Hotel owners are also being more strategic when it comes to property upgrades.
Ellen Brown, director of acquisitions and development for Denihan Hospitality
Group, said that her New York City-based company has only one significant renovation project currently under way. It has postponed upgrades at other properties for
the present time.
Obtaining funds for any kind of major renovation in today’s lending climate is
difficult. However, all the panelists stated that they will allot dollars in order to maintain a good guest experience at their hotels.—Maria Wood
Monty J. Bennett
President & CEO
Ashford Hospitality Trust
James E. Fitzgerald
Managing Director, Hotel Investments
Principal Real Estate Investors
SVP, Acquisitions & Business Development
Pyramid Advisors LLC
Joel W. Hiser
Horwath Hospitality Investment Advisors
Goldman, Sachs & Co.
Red Roof Offers Incentives to Build Prototype
In an effort to jump-start development of its latest prototype, Red Roof Inn has
introduced an incentive package for the first 50 developers who agree to build the
latest version of the economy lodging brand.
“At a time when the economy and the industry are facing challenges, we feel
this is a good stimulus package to help those franchisees in a position to develop”
to select this prototype, says Robert Wallace, senior vice president of franchise
for Red Roof in Columbus, OH. He says two
developers have already taken advantage of
the offer, including one building the first
NextGen model in Locust Grove, GA, outside
of Atlanta. The 65-key property is set to open
early next year.
Among the inducements are a $50,000
credit memo that can be used to defray costs
any time during the course of the franchise
Red Roof Inn’s NextGen room agreement, which typically runs 20 years, and
no royalty fee for the first seven years of the
contract and a 2% cap thereafter. The royalty charge is normally 4.5%, according to
Wallace.—Maria Wood ◆
Nelson F. Migdal
Greenberg Traurig LLP
RSBA & Associates
Finance & Business Development
Waterford Hotel Group Inc.
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Donald W. Wise
Global Hospitality Industry
HOTEL PERSPECTIVES IS PUBLISHED IN THE JANUARY, MAY, AUGUST
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