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Originally published in AAHOA Lodging Business, April 2009

2009 Hunter Investment Conference

March 15-17, 2009 at the Marriott Marquis Hotel, Atlanta, Ga.

By Jeffrey Cohen

The 21st Annual Hunter Hotel Investment Conference was held at the Marriott Marquis Hotel in Atlanta, Georgia. Bob Hunter, the conference founder, kicked off the event with a positive message and asked industry leaders to see the hotel industry as “a glass that is half full.”

Dr. Jareev Dhawan, director and associate professor of Economic Forecasting Center at the J.Mack Robinson College of Business at Georgia State University, followed with a presentation that addressed the economic conditions the hotel industry faces. He looked back to pinpoint the start of this vicious downturn — primarily pointing to the collapse of Lehman Brothers as the tipping point — and then discussed the positive and negatives affects of this seminal occurrence.

Dr. Dhawan noted that the recent attack in the press on corporate meetings has definitely had a huge impact on the convention and hotel industry. Another speaker, Jan Freitag of Smith Travel Research, looked to the Obama administration to help stop the attacks on the meeting industry. He stressed that meetings are a crucial component to the health of the hotel industry and that meetings are crucial for businesses to meet and do business.

Later in the conference, however, other speakers would take the “glass is half empty” attitude. During the Leadership and Experience panel, Mark Woodworth, president of PKF Hospitality Research, predicted a jobless recovery. For the hotel industry, he expected double-digit declines in both revenues and profits. Prior to the conference, PKF released a research report saying that the decline in the hotel industry would be deeper and longer than originally forecasted — it is forecasting that the average U.S. hotel will experience a 30.1 percent decline in profits during 2009, a level of deterioration not seen since the 1930s. Nancy Johnson, chief development office at Carlson, cited greed as a major factor that lead to the economic collapse and Dennis Quaintance, CEO of Quaintance-Weaver Hotels was not optimistic about a quick recovery.

Between the major sessions and focused breakouts, the attendees gathered in the hallways to catch up. Bankers, lenders, brokers, developers, hotel owners and a new addition, workout specialists, met in small groups to discuss the hotel industry. Finding money for a refinance or a new deal was the main concern. Hotel owners expressed much worry about occupancy levels, revenues and the need to refinance recent deals. Money was on the attendees’ minds, and the breakout sessions reflected this with titles such as, “CMBS Issues and Answers”, “Advanced Financial Strategies” and “Financing Fundamentals”.

The second day of the Hunter Conference started with an address by Joseph McInerney, President & CEO of AH&LA. He shared with the morning crowd some inside views of a meeting that the U.S. Travel Association was supposed to have with Larry Summers, U.S. Treasury Secretary, on the morning of Wednesday, March 11th. Apparently, an aide came into the room and announced that Mr. Summers would be unable to attend the meeting. The visibly frustrated CEOs in the room were then surprised when the doors opened and President Barack Obama said the he would be substituting for Mr. Summers. The travel industry advocated for the passage of the Travel Promotions Act. McInerney had flown in that morning to address the crowd and was returning to Washington the same day to continue the work at the AH&LA Legislative Action Summit.

Fred Schwartz, AAHOA’s president, addressed the crowd and applauded the hard work of all hoteliers. He pointed out that AAHOA focuses on three specific areas for its members: 1) Professional development, 2) Products and Services and 3) Advocacy on local, state and national issues. He also applauded Tarun Patel, vice chairman of AAHOA — who will become chairman of the association in April — for his recent appointment to the U.S. Travel Association board. Schwartz stressed that hoteliers should pay close attention to changes to local law and ordinances that could adversely affect their hotel business. AAHOA works very closely with its 9,300 members across the United States to help them when opposing new ordinances that are harmful to the hotel industry.

AAHOA President Fred Schwartz speaks at the Hunter Investment Conference.

The President’s Panel followed with a lively discussion on the state of the hotel industry. In this casual forum, Mit Shah, Senior Managing Principal & CEO, of Noble Investment Group discussed past downturns in the economy and the affect, these had on the hotel industry. His very frank assessment, “that our industry sucks now” was greeted with uncomfortable laughter from the crowd. Stephen Joyce, president and CEO, of Choice Hotels focused on the trend of recruiting top talent.

The President's Panel covered a host of industry trends.

Due to the economic turmoil, he said that there is unprecedented talent in the workforce available to the hotel industry. He noted that Choice would be making an investment in personnel and felt that this investment would reap long term rewards. Bob Hunter maintained his optimistic tone and urged the attendees to be “positive leaders in their workplace.” Deno Yiankes, president and CEO of White Lodging, shared sage advise by urging all hotel operators to “focus inward” and to take a page from John Q. Hammons’ playbook who told him to “carve your goals in stone, but make your plans in sand.” Walter Isenberg, president and CEO, Sage Hospitality Resources may have summed up the state of the industry best when he commented, “We were drinking expensive wine in 2006, now we are anxious and concerned.”

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