How long will the ‘stutter’ last?

Lodging Econometrics JP Ford said construction pipelines are more robust that widely reported with developers building smaller hotels and more of them.

HVS President for the Americas Rod Clough said the struggling economy and midscale segments present good opportunities for acquisition, suggesting clustering where possible and upbranding to transform values.

CBRE Hotels Senior Managing Director Andrea Grigg said F&B revenue, a focal point for operators trying to drive top line revenues, is up 4%. And while EBITDA through July was -3.5%, Grigg implored the audience to push back on what will like be conservative budgets to have a better chance to drive revenue growth even further.

When conversation turned to debt, JLL Americas CEO Kevin Davis made an interesting observation about the robustness of hospitality debt markets. He said post-GFC (Great Financial Crisis), there’s been an incredible amount of capital raised in the private equity markets. “You have debt funds that are particularly active in the space, and there’s more capital than there are deals,” he said. “So, lenders have gotten increasingly aggressive. We’ve seen cap rate expansion over the past 12 months. But you know, it’s interesting. We’re getting to a point where debt yields and cap rates on some assets are starting to converge in such a way that it makes a heck of a lot more sense for a buyer to refinance and own the upside, as opposed to sell right at a cap rate that’s relatively close to the debt yield where you can get a loan.”

Economist perspective

The main attraction of the morning was the annual economic outlook presented by Bernard Baumohl, chief global economist with The Economic Outlook Group. He didn’t hold any punches.

He called the current environment a bizarre moment in U.S. economic history, stating it is next to impossible to predetermine the course of economy with any accuracy beyond a few months. “We have strayed so far away from the norms of economics, politics and the law that it’s virtually impossible to predetermine the course of the economy with any degree of confidence or accuracy – at least beyond the next couple of months,” he exclaimed.

If the U.S. economy was a movie, you’d hear the Jaws theme. You’d have the feeling something is going to break.

Bernard Baumohl

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As he continued to take issue with a variety of Trump administration economic policies, Baumhol added, “If the U.S. economy was a movie, you’d hear the Jaws theme,” he said. “You’d have the feeling something is going to break.”

He called the tariffs a “terribly flawed idea,” he decried the attack on the Federal Reserve, took a stance against the H-1B visa fee policy and said consequences of the current government shutdown could also shut down travel if air traffic controllers walk off the job. In fact, that was the straw that broke the last government shutdown.

All that said, Baumohl is not expecting a recession any time soon, even with all the unknowns that come with the Trump administration.

He said there is no evidence of a pending recession and expects GDP growth of 2.4% next year, followed by 2.8% in 2027 and 2.6% in 2028.

He said consumers are still spending and capital investment in AI and its energy-related products remain an economic stimulus.

Consumers could have a better year in 2026 due to pending new tax benefits, Medicare credits and interest rate drops, which might be a boost when Fed Secretary Jerome Powell’s term ends in May.

Among his closing comments, Baumhol suggested keeping a close eye on next year’s midterm elections. If the Democrats take control of either side of the Congress, he said President Trump might have to reverse course on some of his economic plans.