During the Memorial Day weekend, I surfed my news source to see if I could get an early handle on travel for this important holiday. I couldn’t find much until a news comment caught my eye, “travel business not greased by Greece.” As I have stated several times in recent posts, it’s the global economic news on travel business that influences how we perceive the world we live and make a living in. Thankfully, gasoline prices at the pump did manage a small drop, alleviating the concerns of the undecided: should we or should we not travel this holiday weekend?

As I scan the hotel and travel trade publications, one gets the impression that the recession has been laid to rest and we are on the road to full recovery. It is easy to get caught up in this euphoria, except when you dig deeper and discover that the recovery still remains centered in several of the leading regional markets in the United States, with New York City presenting the strongest case that better days will find their way to other key markets.
 

After covering in the hotel industry for many years, I have seen a few recessions, but nothing that compares to the current downturn. Trying to make sense of it all is impossible.

Yes, the hotel industry remains in recovery mode, but there are constant reminders of its fragility. At best, anyone in a position to call him or herself an analyst agrees that the 2010 end result for the hotel industry will be measured in a very few plus percentage points, with a few more upward points to follow in 2011.

The recession, downturn or whatever you label it pretty much validates that as an industry, we are no longer in control of our destiny.  Every time you think the worst is behind us, some event, be it economic problems in the Euro Zone, an oil leak in the Gulf, or some other situation that in past recessions would have little effect on our emergence from a downturn, becomes a factor impacting the hospitality industry’s recovery.

For those of you who were waiting for my early April “blog”, I offer an apology for the delay and thank you for being patient. As has been my approach during this critical period for the hotel industry, I have been trying to address the problems of foreclosure and bankruptcies that threaten to extend the “recession” for the hospitality industry.

I call the current “recession” we find ourselves immersed in as intractable. There just does not appear to be any game plan that can adequately address the underlying problem: the growing number of foreclosures is overshadowing any positive sign that we are finally on a straight road to recovery.

What I liked most this last week of December was saying goodbye to 2009. It certainly was a year we would all like to forget. But as we head into 2010, most of us, including myself, approach this new year with a great deal of trepidation, hoping that it will offer a solid picture that the recession is indeed over, and recovery will take us through the year with much better results.

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In offering a postmortem on the recently concluded 94th annual edition of the International Hotel/Motel and Restaurant show in New York, let me first turn to comments made by J.W “Bill” Marriott, Jr. a week following the Show. In an address made before The Economic Club, he signaled that the hospitality industry is “just beginning to see tentative signs of an economic recovery.”

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During my morning drive time, the business news presenter on my favorite radio station has used the term "Reset" to talk about the world we will come to know, post recession. Bottom line, he is saying that the world we know has changed dramatically and very possibly forever. Every time he does one of these deals, I think about our hotel industry and how the game changes almost daily.

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While the recent year long recession that has affected the hotel industry so traumatically appears to be over, however, its effects, or to put it more succinctly, “aftershocks” will be with us for awhile. In most major markets, where business class hotels find themselves very much “under water”, cost cutting will have to continue and in all too many instances, the labor force will have to bear the brunt of layoffs. It’s either that or bankruptcy court.

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A few days ago, I glanced at the front page of the Wall Street Journal and said WOW, history does repeat itself. The headline "CIC looks to pile cash into US Real Estate.”

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In my last Blog I said I would offer my opinion on what the message we came away with from the June NYU Hotel Investment Conference. As I read most of the other comments that appeared in print, I wondered if I was attending the same conference as they were. Typical was a blog I just read a few weeks ago from one of my acquaintances in the hotel industry. He like me, pointed to the IREFAC session (Industry Real Estate and Financial Advisory Council) to get the real lowdown on where the industry is. In his own words "The CEO's and the IREFAC guys have access to significant data with analysts at their disposal, yet the prognostications for the future are no better than most others,” concluding that "no one knows." That final conclusion I do agree with.

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Over the past several months, I’ve become quite agitated with the very bearish comments about the hotel industry and its future prospects considering the current recession that has overtaken the industry. The comments are mostly coming from industry insiders who seem to me, at least, anxious to present an extremely negative view as to when the industry can look to recovery. Early on, when the recession overtook the hospitality sector in mid 2008, the prevailing view was that the industry would see a return northward in 2010. Some, me included, saw it happening in the fourth quarter of 2009.

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