Hunter conference notebook

During the course of last week’s Hunter Conference in Atlanta, we sat down with various owners and operators, and of course listened to leaders share their thoughts on the state of business.

Here is a brief summary base on our notebook:

Steve Kirby and Ed James, managing principals at Mumford Co. talked about the ongoing dearth of deals, suggesting the ratio of buyers to sellers is 5:1. They said full-service suburban properties are likely the biggest sources of potential distressed sales. Among the latest transactions from the brokerage advisory firm celebrating its 45^th anniversary:  Hampton Inn Lexington/Georgetown in Kentucky; Hilton Garden Inn Lexington/Georgetown in Kentucky; and the Quality Inn, Beckley, West Virginia.

Ben Perelmuter, the newly named president and COO of TPG Hotels & Resorts (45 owned/78 managed), is settling into his Dallas office, which acts as the operations headquarters for the group. With a greater emphasis on growth in the southeast and southwest, a Dallas office will also better serve to support development. He said TPG will be opportunistic for third-party growth and grow more organically in Texas. This comes after the group opened a property about every two weeks last year. Perelmuter, who spent 15 years with Aimbridge Hospitality, said driving rate equals better flow through, but in the next breath said labor retention can’t be overlooked in that equation.

Justin Jabara, president of owner-operator Meyer Jabara, boasted that 2022 was the company’s best year, attributing success to corporate culture and restructuring after the pandemic started. The company currently has 32 hotels, about two-thirds with a meaningful ownership stake. The plan is to grow the third-party business and the group is adding to its development team this year to meet that goal. Jabara said the company is building its pipeline slowly with some deals sitting in final planning stages, while a few others push forward. Meyer Jabara will be more of an acquirer moving forward, using strategic partnerships with family offices and PE firms, and is not an active seller. Jabara lamented the cost of insurance and utilities, especially in Florida, and hopes the worst is behind them.

Brian Young, evp and chief investment officer, Hospitality Ventures Management Group, an Atlanta-based investment, ownership and management company, said they saw business jump 30% in 1Q23 versus 2022 and is forecasting a 19% increase in RevPAR in 2023 versus 2019. The pipeline has 10 projects coming alive in the next six months, a mix of acquisitions and management deals. Cole added that HVMG is selling some assets to help with refinancing. The group, currently with 53 hotels, is investing heavily in next generation technology to capitalize on the large amount of data available internally. Thus far, HVMG has committed more than $500,000 in data warehouse architecture and visualization tools since 2021, with plans to invest further.

Yes, we’re going to have another story like the Federal Reserve or something else. But we should take courage from the fact that the industry has not been broken.

Elie Maalouf

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The CEO session had a few noteworthy comments:

Elie Maalouf, CEO, Americas, IHG, on how he feels about the industry at the moment: I am a long-term optimist. Yes, there is the pandemic, supply chain, inflation, higher interest rates – it just hasn’t broken the will of people to travel; it hasn’t broken this robust industry. Demand is near record rates. Global travel is actually just resuming. China is just booming again now. Europe is very strong. I was in Europe last week and everywhere I went – Florence, Rome, London – they never had a low season. They’re expecting a booming summer. Yes, we’re going to have another story like the Federal Reserve or something else. But we should take courage from the fact that the industry has not been broken. It's been interrupted here and there but the long-term trends are really good. The fundamentals are unchanged.”

Geoff Ballotti, president, CEO, Wyndham Hotels & Resorts: When we think about 2024-25 and beyond and the $1.2 trillion spent on the infrastructure bill, and the other $300-400 billion that will be spent on the Chips and Science Act, the opportunity ahead in the next 10 years is just beginning… All the panels have been talking cautiously optimistic about select-service development, obviously in reference to financing and getting those built, but I’m really optimistic in terms of what’s to come during the midweek, end of weekend from that infrastructure bill.