by Loren G. Edelstein | August 01, 2009

NYU Hotel ConferenceM&C's Loren G. Edelstein spent two days attending educational sessions with hundreds of high-level hotel industry executives at NYU's Hospitality Industry Investment Conference in New York City in early June. Following are some of the choicest quotes gleaned from hotel executives, owners and investors.


"For our company, we've seen a lot less discounting than in the last recession. We've told our folks that lower rate does not drive demand, it just drives lower revenue."
-- Stephen P. Joyce, president and CEO, Choice Hotels International

"If rates go low just because we're not sophisticated in how we price, we'll have a hard time getting rates back up."
-- Frits van Paasschen, president and CEO, Starwood Hotels and Resorts Worldwide
"Our brands are not compromising on rate, and we're taking a hit in occupancy."
-- Homi Vazifdar, managing director, Canyon Equity LLC
"We as an industry have accumulated all these revenue specialists who think they need to play with the numbers. What we look at is cash flow -- the focus needs to be on setting your rate to drive cash flow. One of the smartest things we did was properly price our beers at the bar. A fairly priced bottle of Bud sells guest rooms. If you rip them off at the bar, guests are going to resent that, and next time they're going to stay elsewhere."
-- Michael George, president and CEO, Crescent Hotels & Resorts
"The key operative is value. Whether it's free admission to the health club or breakfast or something else, whatever increases the perception of value drives business."
-- Thomas Edward (Ted) Middleton Jr., senior vice president, managed development, The Americas, Hilton Hotels Corp.
"The customer is looking for predictability and fiscal responsibility. With CMP pricing, the customer can go back to the boss and say, 'I know what the price is going to be and it's not going to cost any more than this, and here's exactly what we're going to get for our dollars.'"
-- Debra Bates, CFO, Dolce Hotels and Resorts
"Luxury is not dead. It will come back in a different form. It will come back as more relevant. The years of bling bling are gone."
-- Robert Gaymer-Jones, COO, Soluxury HMC - Sofitel WorldWide
"Fewer markets will support a luxury hospitality product. There are only a half-dozen markets in the U.S. that will truly support, on a rate basis, an ultra-luxury hotel. I'm going to be focused on that. I think there will be a consolidation of where you go and a consolidation of brands."
-- John Scott, president and CEO, Rosewood Hotels & Resorts
"The luxury market is going to struggle for the next couple of years, but if you look at luxury over the last 22 years, it has significantly outperformed the rest of the industry. It is more volatile -- it gets it the hardest -- and then it comes back the hardest. Luxury will lag, and then it will outperform the rest of the industry."
-- W. Edward Walter, president and CEO, Host Hotels & Resorts Inc.
"Today, luxury is not opulence. If the physical look is decent, you'll do just fine. For properties under development now, you can go back to the architect and say, 'Downplay this part here.' "
-- Homi Vazifdar, managing director, Canyon Equity LLC
"We're seeing shorter lead times, and our corporate customers are being very careful about how many rooms they book. They are booking fewer rooms than they think they will need, and showing up with more people. They are confident they can get the space they need and are willing to take the risk. There are also a lot of tentative contracts; customers are very reluctant to sign.
-- Debra Bates, CFO, Dolce Hotels and Resorts
"Respond. Just respond to client requests, and you'll be better than your competitors."
-- Fredrik Korallus, executive vice president and COO, Radisson Hotels & Resorts - The Americas, Carlson Hotels Worldwide
"We're experiencing F&B declines of 30 to 40 percent in some cases. It's a pretty ugly environment. Guests are starting to eat less often at the hotel. We're looking to bring in celebrity chefs and well-known concepts to try to keep the guests in the hotel for meals. There's a general trend toward food that is fresh, simple and healthy. Our best approach to date has been third-party leases -- getting out of the restaurant business and giving that space to another provider."
-- Thomas Edward (Ted) Middleton, Jr., senior vice president, managed development, The Americas, Hilton Hotels Corp.
"Bar business is up. People want a product that is priced right, provides a good environment, maybe a band, attractive servers. We operate all of our F&B ourselves; we see it as a critical component of providing a full-service product. The guests are looking for it. I hear a lot about this healthy eating trend. I don't buy it. What's being eaten at our hotels is good burgers, good sandwiches and good pastas that are priced right."
-- Michael George, president and CEO, Crescent Hotels & Resorts
"Eighty percent of our guests eat the breakfast. It's important to get the breakfast right."
-- Fredrik Korallus, executive v/p and COO, Radisson Hotels & Resorts - The Americas, Carlson Hotels Worldwide
"If operators and owners sit down and chart a path for the future together, it can be worked out. We have written five-year action plans. Big cap X items will have to wait."
-- Rakesh Sarna, COO – International, Global Hyatt Corp.
"It is the best time to renovate. Renovation costs are down. We're trying to take advantage of that. We're spending $10 million renovating the rooms at the Mansion on Turtle Creek. Unfortunately, occupancy is down, so it's a good time to do it. We can also renegotiate good loan terms and demonstrate that we are investing in the product. Lenders are receptive to that."
-- John Scott, president and CEO, Rosewood Hotels & Resorts
"Sure, operators want to renovate their resorts in this market. But the answer is no. Do you read the Wall Street Journal, guys? The market has tanked. It sounds nice -- it gives you good marketing buzz -- to say now's a good time to renovate. But no. We have an operator right now who says he wants to put in a Pilates studio, and this is a good time. We say, 'What?' No is no."
-- Homi Vazifdar, managing director, Canyon Equity LLC
"It's no surprise to anybody in this business that the mystery index is pretty high these days. But in our shop, we think we have hit bottom and are starting to see some pickup. The bigger question is, when will we start to see some rate recovery? We're beginning to see the signs, in increased demand on the transient side, but a lot of that is tied to rate enticements. From a group perspective, the last six months in terms of booking pace has been 55 to 60 percent of the prior year. We are beginning to see booking pace improve. Now, we're at about 75 percent of prior year. We expect over the next year or so we will see occupancy increase but average rates are at a level we'll probably see hold for the foreseeable future."
-- Jack Adler, president and COO, Loews Hotels
"I'm tired of being the negative guy, but I'm hearing people say, 'I think things are going to get back to normal eventually.' They're assuming there will be a recovery, but that is a big assumption to make. Does the demand come back in the way it has in the past? I'm not so sure."
-- Michael Medzigian, chairman and managing partner, Watermark Capital Partners LLC
"I agree there is a permanent shift. Orange is the new black. We're going to see rate go up by 5 percent and say things are getting better."
-- Steven R. Goldman, president, global real estate and development, Hilton Hotels Corp.
"With an incident like swine flu, you realize how quickly an unforeseen event can affect your business. What worries you as a hotel industry executive, what keeps you up at night, is the thing you can't anticipate.…People are going to do things in a different manner. My concern is that it will be permanent."
-- Jonathan Tisch, chairman and CEO, Loews Hotel