Sitting in the suddenly quiet lobby at the Hilton San Diego Bayfront, I’m still trying to wrap my mind around what went down at ALIS. I guess it’s not a surprise there was very little, if any, news to come out of the event, but the positive vibe and optimistic feel from most of the 2,000 attendees were moderately surprising after the dismal results of 2009.
Traditionally a time for major announcements and new product offerings from the major hotel companies, the only real legitimate news to come from the event was Marriott’s announcement that the seven Kessler Collection hotels would be the first to join the new Autograph Collection. Beyond that, there was very little. I guess a year with almost no new development, historically low operating results and only a handful of transactions will do that.
Perhaps that’s what made the general sense of optimism so surprising. Even after the not-so-good projections from Smith Travel Research and other research firms to open the event, execs from companies like Hilton and Marriott down to the smaller owners and operators in attendance were upbeat and almost excited about the 2010. Even attendance was up this year, the fourth largest crowd ever, according to show organizer Jim Burba.
Realist and brutally honest Laurence Geller of Strategic Hotels and Resorts was almost giddy with excitement during the final session of the event this morning. He boldly predicted a RevPAR increase by this May, just four months from now. The other major players on stage didn’t disagree, almost unanimously agreeing there’d be an uptick sometime this year.
I hope they’re right.

Just last month, some bloggers were speculating that Hilton and Starwood were about to reach a settlement in the nasty corporate spying lawsuit that first blossomed last April. Instead, earlier this month the situation got even nastier as Starwood amended its filing to accuse 44 of Hilton’s top executives of being involved in the plot or having knowledge of it.
In the original suit, Starwood claimed two of its former executives—Ross Klein and Amar Lalvani—went to work for Hilton and took with them proprietary company information they used to develop Hilton’s Denizen brand. Once the alleged plot was uncovered, Klein and Lalvani left the company and Hilton halted work on Denizen, a new brand that was aimed directly at the upscale lifestyle segment pioneered by Starwood’s W chain.
Most damning in the updated filing is the charge that Hilton CEO Chris Nassetta and former development chief Steve Goldman knew of the corporate espionage and did nothing to stop it. Goldman left Hilton last year without comment from the company. The suit also alleges that Hilton has used Starwood’s purloined “secret sauce” as it develops other high-end brands, including the Waldorf-Astoria Collection, Prestige Portfolio and Conrad.
Suits are never fun and generally only serve to make lawyers happy and rich. The timing of this additional filing seems particularly awkward given that most of the industry elite, including top officials from Hilton and Starwood, will gather in San Diego next week for the ALIS Conference. Scanning the program brochure, I see Nassetta and Starwood chief Frits van Paaschen aren’t scheduled to be on any panel discussions together. But you’ve got to imagine they’ll run into each other in the hallways or lounges of the Hilton Bayfront. I hope, by some chance, I’m there when it happens to listen to their exchange of pleasantries.

Anupam Narayan is out as president and CEO of Red Lion Hotels. In a terse announcement this afternoon from the Washington-based chain, Jon Eliassen was named interim head of the company. Narayan’s departure was only explained by saying his “employment ended on Jan. 13.”
I wish Narayan all the best. At Red Lion and Best Western before, I always found him to be a serious, thoughtful and creative lodging industry leader. Perhaps he left on his own accord, but it doesn’t sound like it. I sure, however, he’ll be sought by another hotel company or even a business outside of lodging. If the latter is the case, then it is a serious loss for the hotel industry.
We’ll provide additional details as we learn of them.
Eliassen is an independent director on Red Lion’s board.

With hotel development in the dumper in the U.S., a number of chains are looking elsewhere for growth. This week, India came into focus for two companies—Choice Hotels and Carlson Hotels—as both made major announcements during the Hotel Investment Forum India Conference in Mumbai. Both chains made acquisitions and spoke of aggressive growth in the country.
Carlson raised its stake in RHW Hotel Management Services from 13 to 87 percent, creating a new integrated organization to develop, operate and market hotels in India. Carlson also said it plans to triple its Indian portfolio—from 28 to 78 hotels—by 2012. Half of the growth will come in the Radisson brand, with another 15 Country Inns & Suites and 10 Park Plaza or Park Inn properties in the plans.
Not to be outdone, Choice said it purchased the remaining 60-percent ownership in Choice Hospitality India, its master franchisor in the region. And without placing a number on its growth goals, Choice President & CEO Steve Joyce says the company plans to “focus extensive development resources on growing our presence in India.” The company also currently has 28 hotels in the country.
While these grandiose announcements make good copy, it’s a difficult process to develop hotels in India, a country that, despite its democratic traditions, solid workforce and economic growth, has major infrastructure issues that must be solved before any meaningful widespread U.S.-style lodging can take hold in the country. Roads are lousy, the power grid is sketchy and a potential for civil unrest or terrorism lingers. One strong positive, however, is the Indian-American hotel community. Many U.S.-based Indian hotel owners are very active in developing lodging properties in their native land. In many cases, they have the contacts and in-house partners available to make deals and developments happen. It will be very interesting to watch the Indian hotel market blossom in the next decade or two, thanks in large part to the efforts of American companies and citizens.

It’s no wonder New York City’s hotel industry has such severe problems. Demand is down, occupancy is off and rates have plummeted; yet the market expects to absorb 11,618 additional rooms in the near future, probably this year. According to new data from Smith Travel Research, the 79 new hotels under construction in New York City amount to an astounding 13 percent of current supply. No market can absorb that kind of growth very quickly; it’s almost impossible in the current recessionary market.
By contrast, the 3,854 rooms under construction in Houston account for just 5.6 percent of the city’s current supply. Dallas is third with new builds representing 3.4 percent of the current supply. Also in the top five are metropolitan Washington, DC and Atlanta.
In 2009, New York saw demand decline by two percent, while RevPAR fell 28 percent. It will be a long, slow climb for the city’s hotel industry to rebound to its heyday of the mid-1990s. In the meantime, a lot of properties will suffer and more than a few will become distressed, change hands or worse.

Starwood’s well timed release today announcing projections to add more than 12,000 jobs to the global workforce in 2010 was a stroke of genius. The release came just days after a report from the U.S. Bureau of Labor Statistics said unemployment remained at 10 percent in December with more than 15 million unemployed people. The news was picked up by most major business news organizations (including the Associated Press, which means many papers across the country will likely run at least a blurb on the news) and any positive employment news is good news in today’s economic environment.
The bulk of the 12,000 jobs will come through a projected 80-100 new Starwood hotels, most scheduled to open in the U.S. I’m not questioning the numbers or news, but I’m thinking that most hotel companies (Marriott, Hilton, etc.) are opening a similarly good number of hotels, meaning they are also adding jobs to the workforce. I’m not sure if the number takes into account any likely lost jobs through attrition and conversion, but most companies probably could paint the same pretty picture. Kudos for Starwood for adding the positions, but also for taking advantage of the opportunity for some positive news on the heels of the negative unemployment news.
The news of the added positions seems obvious to me, but it sure sounds good.

La Quinta’s open invitation and access for the trade press to attend its brand council meeting last week was a great idea. The brand prides itself on being different and last week’s event was proof of that. The invite came in many ways because La Quinta decided against holding a national conference this year, the traditional time and place where the media gets an inside look at the company’s performance and future plans. The brand council meeting felt like a school board meeting—except that it was a bit more fun (trust me, I’ve slept through a couple during my time in the newspaper world). The execs, from Wayne Goldberg and Raj Trivedi on down, were loose and laid back. It was clear they took the job and day’s events seriously, but they weren’t afraid to give, and mostly take, some good natured ribbing to, and from, facilitator Lee Dusher, the franchisees and some media members.
The event was a great way to inform the media of La Quinta’s results and upcoming plans, but also to offer an inside look at the company’s unique approach. It was relaxed and casual, franchisees clearly had a voice and the company didn’t pull any punches, with franchisees or the media. It was a refreshing experience and I don’t think La Quinta would have done things any differently had the media not been there.
I think the only other news that came from the day, in the media roundtable after the council meeting, was the fact that La Quinta will definitely have a conference in 2011 at a yet-to-be-announced location in March.

A new study from the National Business Travel Association claims the attempted terrorist attack on Christmas Day won’t have much of an effect on business travel. If they have the budget, business travelers are going to hit the road, no matter the threats or obstacles in the form of increased security measures. That’s a truism few can argue with.
The story is profoundly different, however, for leisure travel, which is the bread-and-butter business for many hotels, and not just those in resort areas. The occasional traveler (us road warriors refer to them as “the amateurs”) is much more skittish when it comes to threats of terrorism. In times of stress, Mom and Pop and the kids are more likely to stick close to home, which is bad news for the already-hurting hotel industry. Another wild card is the foreign leisure traveler. In the early 1990s, just before the Kuwait war, the Japanese government foolishly advised its populace to not travel, a development that crushed the Hawaiian tourist market for months.
God forbid, but another terrorist attack, even a half-assed attempt like we saw last month, could unleash widespread fear and hysteria among would-be travelers. Unfortunately, all we can do as an industry is pray it doesn’t happen.

Now that we’ve finally closed the book on 2009, a year in the hotel industry that can only be described as dismal, let’s hope the worst is over. Instead of making predictions that probably won’t come true, here are five New Year’s resolutions to help make the road to recovery smoother.
1 – Do not cut or hold rate just because the guy across the street is or because some expert tells you not to. This may be one of the biggest challenges facing hoteliers and the industry this year, so don’t just respond to someone else. Make an informed decision and take everything into account, from any and all revenue management software to your franchise and management company’s expertise to the guy across the street to your other competition to your historical data to the effect occupancy has on operational expenses to the opinions of the experts to your favorite bartender, if he or she happens to have a thought. Lowering rate may not increase demand, but holding rate may cost you customers. Understand the intricacies of this challenge and be proactive, not reactive.
2 – Keep promoting, whether it’s with advertising, public relations initiatives, social media or by whatever means you have, now is definitely not the time to cut back on sales and marketing efforts.
3 – Speaking of social media, don’t be afraid of new technology. By now we’ve all heard of Twitter, iPhones and apps, but there’s sure to be more coming this year. Understand and embrace the new ways of communicating with your customers and employees.
4a – Keep your customers happy. You may have been forced to cut staff or amenities, but you can’t let your guests leave unhappy. A satisfied customer is a loyal customer.
4b – Keep your employees happier. Be honest and straightforward, even if you have to cut hours or lay people off. Keep the lines of communication open and if you can’t reward your best employees with financial bonuses or raises, do the little things like saying thank you, sending a personal note or buying the occasional lunch. Create a positive work environment and provide the tools they need to do the job. You’re likely asking the most important asset you have to do more with less. Don’t forget that and remember a happy and loyal employee is the most important thing to helping make No. 3 a reality.
5 – Don’t be afraid to take a chance. Whether it’s in a decision to renovate or build, or on pricing or a new marketing promotion, be willing to roll the dice. There are plenty of bumps ahead on the road to recovery, but those willing to take an alternate route may end up there first.