Trump, Malek, Tucker!
A rapidly changing world is creating big changes in the hotel industry, speakers told us yesterday at our national Bisnow Lodging Investment Summit ("BLIS") at the brand-new Marriott Marquis. In short, an upturn in the turndown industry.
We snapped Trump Hotel chief Jim Petrus (with Hunton & Williams real estate guru Rori Malech) saying they're embracing social media (including The Donald's almost three million Twitter followers) to expand their brand, noting that Trump Hotels was even able to secure a $250k wedding event off a Pinterest post. As for turning the Old Post Office into an ultra-luxury hotel, Jim says Trump will officially take over June 1. The firm is feeling confident about restoring "a part of Americana," since Trump has extensive experience with historic rehabs like Grand Central in NYC.
Daily Caller editor and TV analyst Tucker Carlson kicked the festivities off by saying swift changes in demographics, free markets, religion, and ideology are having a profound effect on politics, citing Mitt Romney's recent support of a minimum wage hike as a prime example of how things have shifted. As for 2016, Tucker says that while Hillary Clinton is the presumed Democratic frontrunner, Sen. Elizabeth Warren is actually his pick to take the nomination, since her politics are more closely aligned with the party than Hillary's.
Thayer Lodging Trust chairman Fred Malek (right, with Pircher Nichols' Gene Leone) regaled the crowd with his investment strategy, which has of late included the purchase of the Ritz Carlton in San Francisco. Fred says the firm won't buy anything unless it's convinced it can double operating income, and also says being conservative on leverage is the way to go. The former Marriott president (1981-1988) also says he operates by a piece of advice JW Marriott Sr. gave him: "Success is never final... the best days are ahead." (So no rioting if the Wizards win. You'll just feel foolish when they're even better next year.)
The lending world is still wrapping its head around financing hotel deals, says Trust Hospitality CEO Richard Millard (far right), making new construction of hospitality increasingly tough. Richard was part of our deals panel, including Arent Fox's Kimberly Wachen, Buccini/Pollin Group's Dave Pollin, Lowe Hospitality's Rob Lowe, and DiamondRock's Mark Brugger. Rob says Lowe will start renovations on the Embassy Row hotel on Massachusetts Avenue within the next few months, including a new integrated bar/social area in the lobby and a revamped pool deck up top.
The state of the lodging industry came from Holland & Knight’s Joseph Guay, STR’s Jan Freitage, Hotel News Now’s Patrick Mayock, HotelAve’s Michelle Russo, and LW Hospitality Advisors’ Dan Lesser. The best Q1 hotel occupancy was in San Francisco, Nashville, Denver, Houston, and LA/Long Beach. DC was down from last year’s inauguration and this year’s bad weather. (You think parliamentary democracies call early elections just for the inaugural-based tourism boost?) The pipeline has about 100,000 rooms under construction and group travel is on the rise again. But the industry should watch businesses like Airbnb, which has 40,000 listings just in Manhattan. Intermediaries are another concern with commission rates expanding. And look out for Google and Amazon, which will surely get into the travel business.
Our Marriott Marquis panel was the dream team behind DC’s newest and largest-ever hotel: Paladino & Co’s Tom Paladino; Hensel Phelps’ Stan Carlat; Capstone’s Norm Jenkins; Quadrangle’s Chris Gladstone; Cooper Carry’s Bob Neal; and Marriott Marquis’ Dan Nadeau. The May 1 opening came after 13 years of drama, from the Lehman Brothers bankruptcy disrupting capital markets just as the project was getting ready to seek funding to figuring out how large to make the hotel. It has 1,175 rooms and over 600 full-time employees. The hotel was built using a complicated top-down construction method, which means a large frame was used to keep the structure intact as the building went 150 feet below street grade.