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HOW EVOLVING CAPITAL MARKETS DICTATE PORTFOLIO MANAGEMENT .
Contributed by DOUGLAS P . HERCHER & STEPHEN O ’ CONNOR , ROBERTDOUGLAS
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The last four years have been a Homeric journey in hospitality . Like Odysseus lashed to the ship ’ s mast to avoid being drawn into disaster during a perilous journey , investors have had to similarly brace themselves . In this case , the threatening Sirens were quick in succession : COVID , supplychain disruption , inflation , high interest rates . For many owners , the pandemic and higher interest rates represented existential challenges . Triage replaced strategy and success was measured by the ability to fight another day . However , as
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long-term rates have subsided and the prospect of similar declines in short-term rates has improved , we are entering a new phase in the market .
Today , with liquidity returning to the market , there is an opportunity for owners to begin the process of carefully evaluating their portfolios and determining where and how they will deploy capital in the coming years . We see an interesting tension in the capital markets , signaling that the next leg of our journey will also be fraught with challenges . There ’ s a definite yin-and-yang dynamic : Even as supply chain and labor cost growth begin
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to moderate , the return to a more normalized balance of leisure and group travel demand requires owners to be nimble and will drive capital allocation decisions . Though the worst of inflation appears to be behind us , we are still dealing with a dramatically higher cost of
Douglas P . Hercher
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48 hotelsmag . com Oct / Nov 2024 |