July 8-Hospitality/Travel/Resort/International Trends

Tonight's discussion started off talking about the hospitality industry. It is hurting right now because of the recession we are in. Tourists are not traveling and businesses are not traveling nearly as much as in the past. Businesses are trying to find ways to save money. So they are having day conferences or using a lot of technology to do business across the world to be more efficient and lower their overhead. Individual companies are becoming more efficient with their money also. An example would be a builder located in Dallas, the architect located in New York, and the construction management company would be in California. All the companies would come together via the internet and talk using a web cam. They could also have web cams on the construction site for others to see the progress being made.

Even though the economy is bad. The hospitality industry's top management said two major things things to focus on in the future is growth and finding other streams of income. In the past, the major thing wanted was efficiency. Efficiency can be maxed out, and has by a lot of hotels because they have dissected their balance sheets. Then put them backed together with with least amount of costs.
Historically in the 70's and 80's hotels were wasteful and then pressure was put on them by capital markets for buyouts. This is what caused them to become more efficient.
Also hotels are trying to be more sustainable. Ex. Hotels are asking customers if they want their towels and sheets washed everyday or not. This helps their marketing and also save their bottom line.

Another way hotels are trying to make some extra money is by offering private residences at their hotels for extended periods of time.

For some hotels, those near the Gulf Coast, things have gotten worse because of the oil spill. Hotel vacancies are drastically down and this is their seasonal period when they usually make most of their money for the whole year. The truth is that many will not make it through this to next year because they have no emergency capital.

Travel trends were the next thing we talked about. Travel is changing because of the economy and because of prices to travel. Now days it is stressful going through the whole air travel process. Many people are doing a variety of different things. Some are traveling on trains to vacation spots. Others are just staying closer to home and vacationing. Trains altogether are an upcoming trend in transportation. President Obama has passed a large bill to bring high speed rail into different corridors in the United States. Most major builders of this kind of train system are not from the US though.

The last discussion we had was about international markets. China could be in a bubble or it just could be growing fast. Their overall debt is very low and their economy grew last year by 8.2%.
Another interesting real estate project going on in the international market is in Iraq. This is very interesting project. It is a multi-building project with 3,500 resident apartments, a 5 star hotel, and an upper class mall. This project is targeting the educated in the area.