6 Things to Know About the Hotel Industry Now

Takeaways from the Associated Luxury Hotels International’s (ALHI) 2015 Industry Advisory Council (IAC) meeting, held at Trump National Doral Miami, Sept. 27–30.

ALHI CEO David Gabri at Monday's general session.
ALHI CEO David Gabri at Monday’s general session.

I was invited to moderate a breakout session at ALHI’s IAC, held the Miami Trump National Doral on Sept. 28–30, and I was looking forward to attending the education sessions leading up to the breakouts. Michael Dominguez, senior vice president and chief sales officer for MGM Resorts International — who presented a Meetings Mean Business campaign update at this year’s IAC — had told me last month that this was one of his favorite industry events.

The 350-attendee gathering organized by ALHI — a global sales organization representing 170-plus Four- and Five-Diamond North American hotels and resorts and 85 alliance-member hotels and resorts in 34 countries outside of North America — included a mix of corporate, association, and incentive planner clients, ALHI members (hotel sales and marketing executives), and ALHI staff.

I’m glad I listened to Michael and was prepped. I found myself furiously scribbling notes at Monday morning’s general session, which provided an overall picture of the meeting and hospitality industries’ health. The research portion, presented by Mark Woodworth, senior managing director for PKF Hospitality Research, couldn’t have been more on point for me, as we are currently at work on the November issue’s annual industry forecast.

Here are some highlights of Woodworth’s overview:

  •  The “very good state” of the industry is expected to continue, although several factors could derail “the good times,” including oil/energy increases not currently on the horizon and overbuilding of convention venues in some markets.
  • Hotel-industry drivers that are most important from the business sector (gross private domestic investment) and consumer sector (personal consumption expenditures) are forecasted to continue to grow through 2016.
  • The lodging industry is at a record occupancy level — 15 cities have hit record occupancy highs.
  • Some markets are experiencing significant new hotel construction — including New York City, Austin, and Houston.
  • The pricing power will remain with hotels. Limited new supply, along with continued demand growth, will lead to even greater room-rate increases in 2016 and 2017.
  • Airbnb is a disruptor that cannot be ignored. PKF estimates that 68 percent of Airbnb units are competitive with U.S. hotels and in 19 out of 60 markets surveyed, the number of competitive Airbnb rooms equal more than 5 percent of hotel rooms. The greatest Airbnb supply is occurring in resort submarkets — Miami Beach and San Francisco top the list.

Stay tuned for our November issue, in which we’ll present a big-picture view of the lodging, travel, exhibitions, and technology sectors.

Michelle Russell

Michelle Russell is editor in chief of Convene.