by Michael J. Shapiro | May 01, 2017
Hoteliers have been riding high in recent years, basking in the glow of record increases in vital categories such as occupancy and revenue per available room, and with demand growth outpacing supply growth since 2010. But with a new U.S. president in office and a world in flux for myriad reasons, will the good times continue to roll?  
M&C recently reached out to several luminaries in the hospitality realm to discuss their outlook for the coming year, particularly when it comes to group business and whether geopolitical and/or economic factors will bring major changes to the industry.

Sources project that supply will outpace demand in 2017 for the first time in eight years. Will this affect the meetings market?

Chris Cahill: The supply side in the luxury and upper upscale in the U.S. and Canada is not really robust. Even if you look at New York City, with the amount of growth there, not that much is at the luxury tier, or even the upper-upscale tier; it's mostly limited-service or boutique product.

Michael Dominguez: Yeah, there is more supply, which is going to help in certain markets, but for meeting planners looking for space? There's just no space available in the U.S., because we haven't built anything significant on an average year-over-year basis since we were back in the peak of 2007. So it's great that we have some extra guest rooms, but that's not going to help if we can't have a meeting.

Frank Passanante: Meeting space actually has seen a continual decline over the last several years. Based on data we have from 2000 to 2009, the hotels that are being built now have 24 percent less meeting space per room. While room supply is catching up with the demand, we're building hotels with less meeting space. As we talk to customers, a common concern that they share is the lack of ability. So we're working to find solutions with our customers, taking a broader look at bundling their meetings business over the next 12 to 18 months or more.

Michael Massari: We've enjoyed somewhere between three and five years of an expansion market, depending on your segment. And it appears that 2017 will add a year to that, and 2018-'19 might add two more. So that would be six to eight years -- one of the longest, if not the longest, expansionary markets seen in the hospitality business. I've been doing this long enough to know that it's not normal. But the indications we have today are that the next three years are going to be quite good.

Peter Strebel: Group business is strong, but we're seeing some challenges in some markets -- it's really specific to the new supply. For example, in Texas, growth is happening in Austin, Houston and Dallas, so we're seeing some more competition in those markets. The same thing goes for a market like Nashville; we've been open there for three years, and it seems like every day there's a new hotel opening there, so that market is under a little pressure now as well. Where we see some pressure on group demand, though, we're able to replace that with surging leisure business. The outlook is still very strong.