PHOENIX — The temperature of the hotel industry ran hot at the JW Marriott Phoenix Desert Ridge and it had nothing to do with the suffocating heat outside . The annual Lodging Conference confab is one of the last chances of the year for the collective hotel industry to offer up its takes on what ’ s now and what ’ s to come and it is never shy to lay out the truth . A CEO-led panel at the conference elicited brand opinions , which all looked for a brighter future after a ho-hum 2024 , one that Joe Berger , president and CEO of BRE Hotels & Resorts , described as , “ Ugh !” citing soft RevPAR and heavy inflation .
But not all shared his
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sentiment . Geoff Ballotti , president and CEO of Wyndham Hotels & Resorts , which franchises brands mainly in the economy and lower-midscale segments , referred to 2024 as the year where the smart money bet big on select-service and extended-stay accommodations , which are where the bulk of Wyndham ’ s franchise assets lie , including its Echo Suites brand , a big economy bet on the longerstay space .
Within the pure economy space sits G6 Hospitality and its legacy Motel 6 brand , which , along with Studio 6 , were agreed to be sold to Indian upstart Oyo Hotels in September in an all-cash transaction valued at $ 525 million . Less than a month later , Julie Arrowsmith ,
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president and CEO of Motel 6 and Studio 6 , didn ’ t have too much more to say about the deal , other than “ we are in learning mode .” Meanwhile , she said after some occupancy challenges for the segment , the economy space is forging ahead and anticipates growth .
WHERE ’ S THE FLOW ? Steady and ready for 2025 rhymed John Murray , president and CEO of Sonesta . And on the deal front is where people should be prepared , in particular with debt becoming cheaper as interest rates come down ; simultaneously , a wall of debt maturities that is coming due will have many owners loathe to refinance .
“ Interest rates coming down
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will help us get better deals ,” said Arash Azarbarzin , principal and CEO of Highgate , which owns and operates hotels . He added that it ’ s prime time to acquire assets against a backdrop of muted supply growth and construction starts . Shortly after COVID , Highgate bought a large pack of La Quinta properties and in 2022 acquired Viceroy Hotels & Resorts , which has a portfolio of 11 hotels . “ 2025 will be a great year for investment ,” he said .
Most investors oftentimes allude to the dry powder sitting on the sideline , readied to be deployed . What unlocks it , Berger said , was a path to a lower Fed Funds rate and bid / ask spreads narrowing further . “ It could make for a big 2025 ,” he said .
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6 hotelsmag . com Oct / Nov 2024 |