The CEO panel at the Hunter Hotel Investment Conference , from left : Moderator Stephanie Ricca ; Larry Cuculic , president and CEO of Best Western Hotels & Resorts ; Julie Arrowsmith , president and interim CEO of G6 Hospitality ; Elie Maalouf , CEO , Americas , IHG Hotels & Resorts ; John Murray , president and CEO of Sonesta ; Geoff Ballotti , president and CEO of Wyndham Hotels & Resorts .
crews , such as the thousands of selectservice hotels that dot the landscape and still offer amenities like free daily breakfast .
Hotel CEOs , here at the Hunter Hotel Investment Conference at the Marriott Marquis , cited the bill as a win for the hospitality industry , something that continues to percolate and could be an anodyne to any slowdown in the economy .
“ We are seeing a lot of business from the infrastructure bill ,” said Julie Arrowsmith , president and interim CEO of G6 Hospitality , parent company of the Motel 6 and Studio 6 brands . She added that the company is seeing “ nice ” RevPAR growth this year beyond even the forecasts .
Geoff Ballotti heads Wyndham Hotels & Resorts , which has hotel brands across the segments , but focuses mainly on select-service and budget-friendly hotels , through brands such as Days Inn , La Quinta , Microtel and Hawthorn . It ' s not a stretch , then , to see how the infrastructure bill would be a shot in the arm for the Parsippany , NJ-based franchisor .
“ The infrastructure bill is impacting corporate travel ,” he said . “ It ' s an opportunity to fuel select service .”
It stands that small- and mediumsized enterprises , or SMEs , are the types of outfits most engaged to correct the nation ' s crumbling or due-for-an-upgrade infrastructure . It ' s the type of road warrior business the hotel industry has missed since the pandemic .
“ It fills midweek business ,” said Larry Cuculic , CEO of Best Western Hotels & Resorts , where business transient is a large part of the member organization ' s focus . “ Secondary and tertiary locations are where infrastructure money will be spent ,” he said .
John Murray , president and CEO of Sonesta , summed it up best : “ Infrastructure creates jobs in the middle , fixing roads , bridges ... and there are hotels along the way .”
It ' s not all gravy , however , something Murray spoke to . Though infrastructure projects have injected more life into the travel sector , it ' s not been a savior altogether . Group business is still not completely back to prepandemic levels and normalized corporate transient is , well , still not back to normal . “ It ' s hard if business parks aren ’ t open ,” Murray said , alluding to the new normal of employees not back into the office five days a week .
ON THE ROAD As infrastructure continues to boost business transient travel , the leisure traveler has been steadfast , filling hotel rooms at lofty rates — pandemic and inflation be damned . “ It hasn ' t broken the will of the traveler ,” said Elie Maalouf , CEO , Americas , IHG Hotels & Resorts .
IHG , as Maalouf pointed out , covers an array of travel segments , including luxury , with brands such as InterContinental ,
Six Senses and Regent . At that top end , Maalouf said , customers are not shy to spend and spend often . “ At the upper end ,” he said , “ there is no resistance . People travel with passion and there is no rate ceiling .”
Borrowing from F . Scott Fitzgerald , Maalouf said , “ The rich are different .”
Lower down the chain scale , inflation has harmed the traveler , who is having to pay more for basics things . Though eggs might still be pricey , utilities , such as gas and electric , are coming down , Maalouf said . “ That ’ s in the rearview mirror ,” he said .
Inflation is a tailwind for hotels , which can reprice their rooms on a daily basis .
MONEY TALK The pandemic might have less impact today but it left its mark . Hotel owners are still not in the catbird seat and the recent banking crisis has only exacerbated its remnants .
Many hotels at the beginning of the pandemic shut down completely and instead of using capital reserves for future improvements , it was used toward debt service and interest carry , as Ballotti pointed out .
Hotel owners still aren ' t whole and much of the deferred maintenance now needs attention , especially as brands give owners less rope . “ Hotels are now riding high ADRs , but maintenance needs to be done after slight neglect . Owners might want to sell the assets instead ,” said Cuculic . Conversely , he said that “ well-capitalized developers who can afford a PIP on repositionings or on ground up projects ,” are the potential winners in this market .
For buyers or developers , a strong brand partner , with strong distribution is still a lender ' s preference . Though the rise in interest rates has made it more difficult to build , building now is something IHG ' s Maalouf said is an easy win . “ If you can build today , you ’ ve built an asset that will appreciate ,” he said .
May 2023 hotelsmag . com 9