It’s hard to have more than a three minute conversation today in the hospitality business, whether it is with a designer, architect, vendor or fellow purchasing agent before the conversation turns to the dire state of our industry.
Let’s face it, after September 2008’s qualifying event which I have coined “the Lehman Brothers Domino Debacle” in which in one fell swoop three of our 5-star projects were suddenly (and possibly irreversibly) put on hold, when the world financial markets shook, where Wall Street giants fell, and the banks nearly collapsed; our industry abruptly decided to go on sabbatical.
Fortunately most of us didn’t feel the pain for about a year, as we were all riding the last vestiges of that huge Hokusai hospitality development wave which was five years in the making. Sadly that wave crashed not only into the beach but essentially into both American coasts at the same time, leaving newbies and veterans alike fighting to pick up the few pieces left.
But has the ever looming cloud of uncertainty fogged our memory? Should we be singing the blues? Aren’t we grateful for the five years of unprecedented growth of our industry? Shouldn’t we applaud the invention of the condo-hotel and the development of all of those spectacular hotels built just to legitimize their adjacent real estate ventures, or are we the fair weather fans of hospitality, praying for the home team to miraculously turn the season around when all of our starters are injured?
It’s easy to despair in the moment. We all get the P&L each month and we all worry over the future period fee projections. There is no question that the hospitality industry is caught in a economical vice grip of negative lending practices and a financially challenged population who has to cut back on travel and tourism. New development and renovations are stuck in a quagmire, and we are in the same lifeboat hoping for a rescue.
In a moment of my own despair, I happened to receive a call from my Father Leonard who instead of going into his family’s jewelry business gratefully entered into the hospitality purchasing business in 1954. His sage comment was something to the effect of, “When you have been in this business long enough you experience the cycles both up and down. It was no different in ’67, ’73, ’81, ’89 and ’01 (MP: I may have the dates wrong but you get the idea). Just batten down the hatches and ride it out. Quality companies always survive.” It made me step back and think of all the recent good times we have had and reminded me to be the optimist I am.
From the recently resurrected optimist, I will leave you with this. As evidenced by Vegas, New York and Orlando, there always seems to be room for another hotel. If not, someone will just implode an old one and build a new one. Maybe it won’t be tomorrow or 1Q of next year, and it is likely it will not match the frenetic pace of 2007-2008 (prior to the LBDD), but the hospitality business will rise again. In the mean time, I am going to smile, enjoy the slower pace a bit, float on the outgoing tide and batten down the hatches.