SPECIAL REPORT : 2013 FORECAST
THE GIST
OVERALL , 2013 LOOKS SET TO BE A STRONG YEAR FOR THE HOTEL INDUSTRY WORLDWIDE .
MICE BUSINESS IS COMING BACK IN MANY REGIONS AND IS A KEY GROWTH DRIVER .
INCREASINGLY SOPHISTICATED MOBILE PLATFORMS ARE THE OUTSTANDING TREND OF THE YEAR .
KNOW the NEIGHBORHOOD
As in any year , 2013 ’ s macroeconomic trends will be distilled into a microbrew of factors at a local or regional level . The “ where ” of the global pipeline doesn ’ t look much different than it did 12 to 18 months ago . The real news is not where to develop , but what and how .
In the United States , the market is still soft enough to be a tempting place for cashed-up companies , particularly in the full-service sector . “ This environment offers significant opportunities for conversions , as we saw with the recent JW Marriott Essex House deal in New York ,” Sorenson says . “ Including our Gaylord acquisition , we expect conversions to account for roughly half of our global room additions this year .”
“ In the U . S ., focused-service and full-service conversions will be a focus for us ,” says Christopher Nassetta , president and CEO , Hilton Worldwide .
Mark Harmon , CEO , Auberge Resorts , Mill Valley , California , predicts the ultra-luxury sector will finally come out of its slump . “ Rates are increasing overall , though demand is growing more slowly ,” Harmon adds .
Loews Hotels , New York City , is looking to double its portfolio within three years — bringing the total to a modest 36 properties . “ We ’ re lucky in that we have the money to buy a property first and bring in a partner after the deal ,” Loews CEO Paul Whetsell says . “ For Loews Hollywood Hotel ( the former Renaissance Hollywood Hotel ), which we bought this summer — it was around a US $ 200 million deal — and we took it down ourselves . We ’ ve started renovations and are in talks with a potential partner .”
Given the upside in real estate value , Whetsell may not be alone in moving toward an “ asset-medium ” ( 20 % to 35 % ownership ) strategy . Beyond the perennial gateways , the most likely targets for investment will be secondary and tertiary destinations that mimic bigcity demand mix . “ Seattle , Portland , San Diego , Dallas and Houston all fit the profile for us ,” Whetsell adds .
Outside of the United States , 2013 may be the year of up-and-coming destinations . “ Rezidor ’ s hot areas remain the young and emerging markets of Russia / CIS ,” Ritter says .
“ Turkey is showing great promise ,” says Eric Danziger , president and CEO , Wyndham Hotels Group .
As emerging markets move closer to maturity , the hunt is on for regions that offer potential , even if infrastructure hasn ’ t quite caught up to development . In Africa , for example , destinations
“ SEATTLE , PORTLAND , SAN DIEGO , DALLAS AND HOUSTON ALL FIT THE PROFILE FOR US .”
– Loews Hotels ’ Paul Whetsell on investment targets beyond the perennial gateways
www . hotelsmag . com December 2012 HOTELS 23