Image: Opening of the 2016 NYU International Hospitality Industry Investment Conference. Photo credit to hospitalitynet.org.
This week, I once again headed to New York for this year’s presentation of the International Hospitality Industry Investment Conference. Hosted at NYU, and recognized as one of the most significant events on the hotel and hospitality management event calendar, the IHIIC brings together some of the lodging and hospitality industry’s leading business minds. With an obvious focus on the investment and business-side of the industry, the event regularly acts as a bellwether for the coming year – if panelists and delegates speak bullishly in their sessions and hallway chitchat, business the following quarters tends to be favorable; when panelists are a little more sheepish, it’s not unreasonable to expect the year to finish soft.
It was with curiosity how this year’s slate of speakers were framing the outlook for 2016 that I scanned this year’s agenda and session line-up. Were certain topics and themes dominating the agenda? Were speakers and panelists already hinting at how the market would play-out in the quarters to come? Judging by how frequently these three themes appeared in the conference agenda, it was a safe guess that differentiation, consolidation, and preparing for the end of the cycle would dominate the discussion at this year’s event. And if the IHIIC’s historical ability to gauge the market for the remainder of the year holds true, it’s a good bet these themes will influence business into 2017.
A topic that frequently appears in the conference’s panel abstracts is “segment differentiation” – and for good reason. AXIS Architecture + Design worked on a number of mid-market select service and entry-level luxury boutique hotel projects in the past year; what was notable about these projects was how similar many of the amenity and service offerings were between them despite their market segment differences. As full service hotels pare down their service offerings to reduce operating costs at the same time select service hotels creep closer to their full service counterparts, differentiating service offerings and hotel design to clarify the line between the two segments will become a skill unto itself. Additionally, as mid-market brands continue to spawn daughter brands that mimic and encroach on traditional luxury brands (Best Western’s Glo and Hiltons’ Tru brands for example), finding unique and authentic ways to differentiate a true luxury (or mid-market) guest experience will be increasingly valuable. Stefani O’Connor’s “Reinventing Luxury” session, Johnathan Nehmer’s “Blurred Vision” panel, and Megan Cocci’s “Differentiated and Experiential Luxury” panel address the differentiation issue.
The protracted Marriott Starwood merger saga may have dominated our hospitality news feeds for the last half year – effectively drowning out other merger and consolidation news – but as Rick Kirkbride’s “Legal Issues in the Era of Consolidation” panel, and Drew Goldman’s “The Year in Consolidation” discussion pointed out, the factors driving the Marriott Starwood deal are driving similar opportunities across the industry.
“Preparing for the end of the cycle”
In a previous On The AXIS blog post titled “Where’s the Peak”, I comment on the curious inability of attendees of this year’s America’s Lodging Investment Conference to decide if 2016 would be another year of record breaking development and investment, or the first year of this cycle’s decreased activity. As it turns out, IHIIC panelists have made up their minds – the period of growth has ended, and imminent contraction is on the horizon. Despite that seemingly pessimistic news, Michelle Russo’s “Leveraged Business Plans” panel looked to take advantage of this turn in the market by discussing opportunities to leverage already distressed properties and projects, while R. Mark Woodworth’s “What to Expect in the Year Ahead” outlined other opportunities only found in mature cycles.
For more on the International Hospitality Industry Investment Conference visit www.scps.nyu.edu/academics/departments/tisch/conferences-events/ihii-conference.html. Attending the conference as well? Drop me a line – it would be great to get introduced!