A panel of CEOs at Americas Lodging Investment Summit were largely optimistic about U.S. hotel industry growth under the Trump administration this week but not without some caution.
Geoff Ballotti, president and CEO of Wyndham Hotels & Resorts; Anthony Capuano, president and CEO of Marriott International; Elie Maalouf, CEO of IHG Hotels & Resorts, Jean-Jacques Morin, deputy CEO of Accor; Chris Nassetta, president & CEO of Hilton and Craig Smith, CEO of Aimbridge discussed the impact of the Trump administration on the hotel industry, immigration reform, the importance of deregulation and economic growth.
"I think there's still a little bit confusion, and there's a lot of executive orders came out very quickly, and so a lot of us are nervous of what's going to happen with labor," Smith said. "We have a lot of people that work in our hotels and are nervous, and I think we would just like to have a game plan to see what's going to happen."
While immigration and mass deportations are dominating the news right now, Nassetta believes eventually there could be a comprehensive solution and immigration reform.
Meaningful Reform
"We may have a once-in-a-generation opportunity, with this administration and where the politics are once that is done, to get comprehensive immigration reform ... to be able to help with some of the workforce challenges," he said.
Capuano believes the Administration can help the industry in a "meaningful way" with debt capital.
"There’s not that free flow of debt—for existing assets, yes—but not for new construction. It’s still a bit constricted,” he said. "Interest rates are going to go up and down, and our collective partners will navigate that, but we have to get debt capital for new construction flowing into the system. All of us sit here with pipelines of dozens, if not hundreds, of shovel-ready projects. "
When asked about who were going to be the buyers this year, Ballotti said the small-business owners, who have just been so far away from the expectation on price recently.
"Every owner we have wants another unit," he said. "As as the interest environment eases and that that gap shrinks, our small business owners believe that there's never been a better time to break ground on a on a that next asset.
Turning to the next hot development markets, Nassetta believes "Nashville might be the next Nashville," but Charlestown, S.C., and Savannah, S.C., have some unique combination of demand with limited capacity. Ballotti believes the large markets of Atlanta and Phoenix are still strong from a pipeline standpoint with leisure, transient and infrastructure demand. Smith believes San Diego's tech and biotech markets will drive development there.
"I wouldn't give up on the cities in Texas," Smith continued. "I think there's still a lot more that's going to happen there. Sometimes we think they're tapped out, but they just keep getting back up and growing."
Much like the hotel industry.