The Refinishing Touch Blog

Hospitality was among the hardest-hit industries in the economic recession. Yet despite declines in hotel operating profits, property values and mortgage capital, both hotel buyers and brokers stand to benefit in the near future in several ways.

One way buyers benefit is that they can purchase properties for bargain prices. Past recessions have demonstrated that hotel values typically drop to between 30 and 40 percent of their replacement cost. HVS, a global hospitality consulting organization, conducted a sample of transactions involving U.S. branded hotels in 2009, and they found that current hotel room prices appeared to be close to the bottom-out range and room prices were significantly less now than they were in 2007.

In addition, many highly discounted hotels are located in neglected areas and markets that have halted or slowed development until the economy recovers. This creates a barrier will help prevent buyers from overbuilding in the future.

Most hotel owners are steadfastly clinging to the hope of economic recovery before putting their properties up for sale. According to HVS, the number of hotel transactions that took place in 2009 were roughly one-quarter the number that took place in 2005. On the bright side, private equity funds have raised billions to purchase deeply discounted hotels with equity capital once they’re put up for sale, which means the funds could provide much-needed financing once mortgage debt becomes available again.

Hopefully the combination of private equity capital, a limited number of transactions and slowly improving occupancy rates will result in increased room rates and an improved market, and with any luck, these efforts will only drive the hotel industry to an even more rapid recovery.

Labels: 2010, economy, Hotel Industry, HVS

Last week the world’s foremost winter athletes descended on Vancouver, kicking off the 2010 Winter Olympics. These Olympics see the realization of more than 12 years of careful planning, and then, only 16 days after they began, they’ll be gone.

The city of Vancouver will be left with more than sporting memories though. In these past 12 years, Olympics planners haven’t just been structuring events schedules and sketching logos; they’ve also been determining what kind of legacy they want to leave in British Columbia. The Vancouver Organizing Committee for the Games (VANOC) took a big step in crafting that legacy by creating the Sustainability Stars program, which recognizes initiatives by sponsors, partners and VANOC itself that promote social, economic and environmental sustainability.

Sustainability Star awardees thus far include Purolator, which created a battery-operated electric delivery vehicle called the Quicksider for Vancouver’s couriers. The Quicksider generates 99 percent fewer greenhouse gas emissions than traditional courier vehicles. The City of Vancouver’s LiveCity Yaletown project, paved with recycled rubber tires, also earned a star. More sustainable than brick or asphalt, the pavers will be used in other parts of the city after the Games end. Teck and the Royal Canadian Mint’s Metal for Medals program is another star recipient. Teck provided metal from e-waste as part of the winners’ medals, created by the Mint, for both the Vancouver Olympics and Paralympics.

Vancouver and the rest of the world will see its share of memorable performances and world records over the course of the 2010 Winter Olympics, the kind of moments that stay with spectators for a long time. These memories are to be cherished, but the Sustainability Stars program ensures that that Vancouver will see its Olympic legacy throughout the city, in tangible, environmentally-conscious ways.

Labels: 2010, Environment, Green, Olympics, Vancouver

For many organizations and hotels, the uncertainty of 2009 means that 2010 needs to start with a definite direction. But where to head?

In 1900 L. Frank Baum published The Wonderful Wizard of Oz, also known as the ‘Great American fairytale’. The story resonated with readers across the globe, with engaging characters, narcoleptic fields of poppies, winged monkeys and the notion that ‘there’s no place like home’. When a tornado lands her in Oz (on the Wicked Witch of the East) Dorothy finds herself wondering where to head after being told to see the wizard in Emerald City for help in getting back home. She’s in an unknown land and doesn’t know quite what to do.

Many hotels, recovering from the tornado of the 2009 economy, find themselves in a similar bewildered state. They’re in an unknown land – one full of low occupancy rates, harsh business conditions, increased competition – with no given directions. Where do they head now?

There may not be a yellow brick road to follow, but a greener path continues to present itself for industry leaders to follow as a means to achieve more sustainable business practices in whatever way possible.

Refurnishing and refinishing are two ways that businesses can help themselves as they continue on their way in 2010. From hotels in need of updating accommodations to provide modern and pleasing décor for guests at reduced costs, to colleges that need to update dorm rooms with slashed budgets, reviewing alternatives to ‘rip and replace’ are not only environmentally-friendly, they’re green – good for the planet, the business, and its reputation.

Businesses are more prepared now than ever for the challenges that might present themselves along the way. Similar to America’s beloved fairytale, the business challenge of 2010 will demand a brain, a heart and courage to push us along. In terms of direction, we know that the green-brick road is a solid start and look forward to the adventures we are bound to meet along the way.

Labels: 2010, economy, Green, Sustainability

As December comes to a close, we say goodbye to the holiday season and a decade that has ushered in (and out) events that have changed the lives of millions for better and worse.

The second half of 2008 brought a sequence of events that would set the tone for challenges that would carry through 2009 and ripple throughout the country and world for the foreseeable future. The riches of the earlier part of the decade were wiped away almost instantly. But, even in the bleakest of times, Americans found ways to live and do business while coping with tighter budgets and limited resources. As a nation and a member of the global society, we hope that each of us has learned invaluable lessons in the need for resourcefulness, conservancy, efficiency and restraint.

Recently, 4Hoteliers posted the top global consumer trends expected for 2010, according to Mintel, an international market research firm, which seems to agree that 2010 will see global citizens making decisions armed with the experience gained throughout the course of the past decade’s events.

Along with resilience as a means to recover from the changes that effected so many people’s lives, consumers are anticipated to re-evaluate and review their decision-making. When they do make a decision to purchase, they will expect a greater level of accountability from companies as a means of rebuilding consumer trust.

According to Mintel, consumers in the new year will have a tendency to lean towards escapism in contrast to the value culture seen in 2008 and 2009 as a way to tap in to new experiences, while consumers will continue to embrace the “media evolution” of social networking and interactive media as a part of everyday lives. The research firm also believes that we can expect to see a return to focusing on ethical responsibility and stability. “If a business is to rebuild its brands with ethical efforts,” they say, “they’ll need to connect with consumers by giving them an emotional reason to buy.” And finally, consumers are expected to make a return to stable decision-making by seeking balance, readjusting and making conservative decisions when it comes to spending.

We look forward to 2010 and a new decade that will surely bring a whole new set of lessons to be learned and a wealth of opportunities for advancement. On behalf of each of us here at The Refinishing Touch, we look forward to continued successes with our friends, new and old, and wish you all a happy, healthy and prosperous new year.

Labels: 2010, consumer trends, market research