At the 34th annual New York University International Hospitality Industry Investment Conference, corporate executives expressed optimism about the year ahead, despite recent signs of trouble in the economy.
During a CEO panel June 4 at the Marriott Marquis in New York City, moderator Lalia Rach gauged panelists’ outlooks after hearing news of the stock market’s worst daily performance of 2012 on Friday. According to The New York Times, stocks dropped more than 2 percent on Wall Street on June 1 and United States government bond yields fell to record lows. Among the factors that drove the stock market panic were the European debt crisis, China’s slowing economy, weak employment in the United States, and the euro zone.
“We are optimistic. People want to travel,” said Eric Danziger, president and chief executive officer of Wyndham Hotel Group. He said that the company’s call volume is up 30 percent and Web traffic is up between 30 to 40 percent on its brand websites. “I think the nature of people both domestically and internationally is to want to travel and we believe it will continue through the rest of this year and into next,” he added.
The U.S. Bureau of Labor Statistics reported that the national unemployment rate rose slightly to 8.2 percent in May. Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, foresees that while the demand profile will be positive for the remainder of the year, the overall recovery of the lodging industry during the next two to three years will be dependent on the employment picture.
Hoplamazian said that Hyatt does not serve the entire U.S. population, and so the customer base that it serves has a better employment picture than the overall averages. “We’ve been living in a demand environment,” he said. Hyatt’s group revenues were up 9 percent in the first quarter versus last year, for example.
Gerald Lawless, executive chairman of Jumeirah Group, also expressed optimism, but said measures need to be taken to make it easier for visitors to travel globally. He cited the World Tourism Organization’s estimation that the total number of outbound tourists from China would reach 100 million by 2020. The implementation of a common electronic visa platform across the world, he said, would ease the process and help the industry continue to flourish. Sustainability issues also must be addressed, he added.
Arne M. Sorenson, president and CEO of Marriott International Inc., said the markets are not infallible, but they are a powerful read on future expectations.
While members of the industry may be more cautious about the future than they were a couple of months ago, and the European debt crisis and domestic politics remain of concern, the panelists shared an overall positive outlook for both the short term and long term state of the industry. “Let’s hope that like last year, business continues to perform strong,” Sorenson said. “I tend to think it will.”