Lodging Conference 2011: Hotel PIPs are On All Owner and Brand Minds
Photo credit: The Lodging Conference
Unable to attend the 2011 Lodging Conference? Check out our recap of some of the event’s most talked about issues.
The 17th annual Lodging Conference took place last week in sunny Phoenix, Arizona, at the Biltmore Resort and Spa. For three days, top-tier leaders in the hospitality industry gathered to discuss opportunities, problems, and projections for the coming year.
Property improvement plans, or PIPs, proved to be one of the conference’s hottest topics.
During the recent economic downturn, many brands became more lenient in enforcing strict timetables for their PIPs, out of consideration for the economic difficulties faced by owners.
However, as the economy slowly moves out of its slump, many brands are becoming gradually more forceful with their PIP requirements.
PIPs can create additional costs for hoteliers looking to acquire struggling properties. Brands often demand PIPs when a location changes ownership, and this demand drives the cost of the property far beyond the face value of the sale.
Regarding the PIPs themselves, many conference attendees pointed out that the hospitality industry saw widespread room upgrades a few years ago. Most hotels installed thicker bedding, flat screen televisions, and wireless internet in their guest rooms. Thus, this new wave of PIPs is more likely to focus on improvements in room furnishing and upholstery or on lobby renovations.
Other topics discussed at the convention include:
-Taking advantage of attractive secondary and tertiary markets. San Diego, CA; Austin, TX; Tampa, FL; Nashville, TN; and Baltimore, MD were all mentioned as cities where increasing tourism is generating a need for new or renovated hotels.
-The prevailing worry of macroeconomic debt. Many conference-goers expressed unhappiness and unease over the astronomical national debt and the worrying international debt situation. Such macroeconomic uncertainty leaves hotel owners wondering how to best prepare for any contingencies.
-After a rough two or three years within the hospitality industry, leaders expressed a cautious optimism for the next few years.