Hospitality Industry – Part of decline of hospitality market is the cost savings going on by corporations and businesses. Companies are trying to cut travel costs and there are many ways in which it is being done. Conferences at convention centers and such are a thing of the past with teleconferencing and technology advancing the way it is. There is no need to set aside blocks of rooms for business trips anymore because of shorter meetings or no meetings at all. Also, with the internet you may not need to travel your employees to sell products or go to tradeshows. It all comes back to that we are moving away from building relationships face to face and it is all being done through computers.
Coming more and more efficient when it comes to utilizing resources when it comes to business travelers and using your employees.
A property can reach maximum efficiency. Once a property becomes fully occupied and all tenants are paying bills on time then reached maximum efficiency. Same goes for OPEX, can only lower expenses so far while still maintaining property and also debt service because you can only go to a certain low point for your cost of debt. The other income line in a pro forma is where a property owner or manager can be creative and figure out other services that may generate extra revenue. Which brings a question, why invest in a property that has reached maximum efficiency? Invest if you want a fixed income security because otherwise there is no upside.
Travel with a purpose – essentially instead of asking yourself where should I go? Ask yourself why go there? So instead of traveling to getaway type place just to go there find out your motivation for wanting to travel in the first place.
Train vs. Plane vs. Car – A point was made in class that because of transit oriented developments trains may become more appealing as a mode of transportation. I agree with this, but still think it will take a while before it becomes people’s first choice to ride the train at least in Fort Worth. In Texas I would argue that most people are like me in that they would just prefer driving and would go on to say that most people enjoy driving even on long trips over any other mode of transportation.
Most important initiatives for hotel operators in 2010 are to streamline business practices and become more efficient and to seek out new revenue generating opportunities. Part of this is focusing on customer engagement efforts such as dining establishments, or coffee shops. Point brought up in class that business travelers need free Wi-Fi and maybe an overnight dry cleaning service at a hotel. Basically hotel operators need to focus on service to their current and prospective clients.
Gulf Coast hotels were not doing well but after oil spill occupancy rates have gone way down. Right now people are just not traveling to the gulf and if they are they are just not spending money like they used to. At this time though is when they make all their money because of the season so now fear not even able to make it next year because they won’t have the cash reserves from their busy season to keep the afloat.
Beijing and Shanghai prices are grossly inflated. Transparency is weak in Latin American markets as they are not very forthcoming with performance measures. New multi-million dollar deal mixed use project could go up in Iraq. This is the first big real estate project in the post-Saddam Hussein Iraq. 3500 residential apartments, office tower, 5-star hotel, and upscale shopping mall are all part of the project. Some believe because of better security in Baghdad it should make foreign investments more prevalent.
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