Wednesday, August 20, 2008

Geller: Hotels will be just fine

As I have said here before, I don't know him personally, but I like Laurence Geller. Yeah, I like his company, but he is also the Chairman of the Churchill Centre, an organization I happen to hold dear because I consider myself a Churchillian. (In fact, this reminds me to renew my lapsed membership. Oops.)

Mr. Geller spoke about the hotel industry at a conference here last month, and he opened with a classic Churchill quote from 1945, when he lost a general election after V/E Day to Clement Attlee and the Labour Party. His wife said,

“Winston, for God’s sake, snap out of it. Look at this as a blessing in disguise.” Churchill’s response: “If so, Clemmie, it’s very effectively disguised.”

(This quote is very apropos for me personally for reasons I will soon discuss in another post.)

Geller's take is also at once Churchillian and Santayanian: history repeats itself. "Manage it, get over it, don’t look backwards, look forwards." I like that. And he's spot on. Room supply growth is modest and once absorbed you won't have much new inventory on line for a little while because of financing considerations. You can take a look at the rest of his reasoning of why things will be all right at NREI.

2 comments:

Anonymous said...

Are you buying shares of BEE? It seems like only me, Bill Gates, and my daughter are buying these days.

If you don't buy in a bear market, you don't buy low and sell high.

Dubai Hotels Booking said...

Mark Lomanno, President, Smith Travel Research: 2007 will likely be remembered as the inflection point towards the industry’s “soft landing” Rate increases remained steady at a little less than 6% and occupancy grew slightly as the hotels that were conceived in the heady days of 2005 and 2006 hit the markets. We have not yet seen the full impact of the subprime mortgage crisis and the tightening of lending standards. The effect of these two forces on the hotel industry still remains to be fully appreciated.

However, with regard to the condo hotel phenomenon that has been so dominant for the past few years, 2007 was the year when much of the speculative froth was scooped off the top as capital tightened, residential sales sagged nationally in the housing slump and many developers and hotel brands moved back towards the hotel condo residential mixed-use model. In any event, our condo hotel pipeline declined sharply. A few condo hotel projects were abandoned and fewer came into the pipeline. With the right regime structure and balance, location and owner, condo hotels are too well-established as the “right” product to argue about it. But the “irrational exuberance” that has characterized this product type in many markets over the past few years finally deflated in 2007, and made room for more rational investors.

 
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