ALIS 2008: Every Cloud Has a Green Lining
By Julie-Keyser Squires
A record three thousand attendees participated in the 7th annual Americas Lodging Investment Summit (ALIS) in Los Angeles this week. The A-List of leading hotel executives, lenders, investors, developers and professional financial advisors shared views on the subprime-lending crisis, the credit crunch, development and – for the first time – a dedicated track on sustainability and the green movement where tech suppliers have a clear opportunity.
High-level takeaways include:
- Attendees were cautiously positive, not recessionary, about the economy;
- Foreign hotel-bound visitors must be made to feel welcomed; and
- Sustainability is a trend that will stay.
Green is Here to Stay
“Eco is an important top line factor; two years ago 16% of Kimpton’s customers selected us because we are green,” said panelist Niki Leondakis, COO with Kimpton Hotels & Restaurants. “Companies want to do business with businesses who share their values, and eco is the latest one.” Kimpton has 42 properties now and 19 in the pipeline.
John Strozdas, COO of the Ambrose Group, LLC, which owns the Ambrose eco-boutique hotel in Santa Monica, California, said their green initiative nets:
- 20% savings on the water bill, and
- 30%, or $32K per year, savings on energy using the government-sponsored ENERGY STAR systems. In addition,
- 75%, or 13.5 tons per year, of the hotel’s waste is recycled.
Marty Collins, president and CEO, Gatehouse Capital Corp., agrees. “We divert over 75% of construction waste, or over 2,000 tons, to recyclables,” said Collins. “Green is the new black.”
Green is the new luxury
“Green is the new luxury,” said Mike Freed, principal and co-owner, Passport Resorts LLC, which owns the sanctuary-like Post Ranch Inn in Big Sur, California. “A key element is that there is no extra labor in putting in green. We use green development to save money.”
Stanley Selengut, winner of the ISHC Pioneer Award at ALIS, is a civil engineer and developer of the highly successful eco-friendly Maho Bay Camps and Estate Concordia on St. John, US Virgin Islands. “We sold $270K from our [recycled materials] art gallery last year, and Maho Bay Camps is a middle class resort with 114 units,” marvels Selengut, who developed a Trash to Treasure Art Center where guests can recycle, recreate and then buy the waste they created. Tie-dyeing, ceramics, glass blowing, watercolor painting, and paper making classes turn trash into treasures.
“Millions of people go to hotels and get ideas of things they could do in their own homes,” said Selengut. “We could be great role models for the way people live in this world.”
Jay Rasudo, chairman, Walt Disney Parks and Resorts, echoes that idea. “Fifty percent of American travelers are more likely to book if it’s green,” noted Rasudo. “When people close that hotel room door, you’ve got them for six or eight hours. You have an opportunity to do small things to open their eyes to issues they care about.”
“The biggest thing we can do as an industry is to raise consciousness,” agrees Mark Hoplamazian, president and CEO, Global Hyatt Corporation.
Emma Duncan, deputy editor of The Economist, who flew in to give a luncheon keynote, writes and speaks incisively about the economics and business of sustainability. “The single thing that’s needed is a change of attitude in the American administration.” Ms. Duncan said carbon labeling is coming to Britain and, eventually, to the United States. “If you’re going to green, you need to move toward carbon neutrality. Get a change of mind in America on the [green] issue; it’s the only thing that matters.”
Where Are We Now?
Another topic that mattered at ALIS was the economy.
The consensus among industry leaders as plenary panelists was: We are headed into a down turn but it will not be deep due to the absence of supply excess. Here are individual points of view:
“We’re in for some fairly difficult times. Things will slow down. We’ll have 18 months to two years of difficult times at the operating level.”
-Stephen F. Bollenbach, former co-chairman and CEO, Hilton Hotels Corporation. Bollenbach received the Lifetime Achievement Award at ALIS 2008.“A period of softness appears somewhat inevitable, but at least it does not have to work off a supply excess.”
-Mark V. Lomanno, president, Smith Travel Research“Smith Travel Data shows what led up to the last two down turns were very strong increases in supply.”and“We are very much in the healthy correction flow. Once we get past 2008 it will be business as usual.”
-R. Mark Woodworth, president, PKF Hospitality Research
“Hotel demand will erode slightly and rates will increase in 2008.” -Scott D. Berman, US Advisory Leader, Hospitality & Leisure Consulting Practice, PricewaterhouseCoopers LLP
In his keynote address, Jean-Claude Baumgarten, president of the World Travel & Tourism Council (WTTC), outlined the macro drivers in a changing world.
“There are headwinds: the credit crunch worry, high oil prices, fear of recession, increasing deficit, the US housing market in trouble, and a weak dollar,” said Baumgarten.
“There are also tailwinds: the rapid expansion of emerging markets including China, India, Russia and the Middle East; improved monetary policy; and strong corporate profitability outside the financial sector.”
“Welcome: Portraits of America” Video a Friendly Face for Foreign Travelers
Baumgarten also weighed in on the decline in overseas travel to the U.S. “Before 9/11, 25 million overseas visitors came to the United States. In 2006, 21 million came,” he noted.
“Immigration is a big issue,” continued Baumgarten, in a keynote address. “In the first 100 steps when people leave the plane, you have a chance to make an impression.”
Walt Disney’s Jay Rasudo agrees. “Foreign tourists are very hesitant to come to the United States, mainly feeling that they are not wanted, not welcome. This is reinforced at the borders.”
To help address this issue, Disney productions teamed with the U.S. State Department to produce and release a ”Welcome: Portraits of America” video to encourage international travel. It includes no mention of Disney logos, products or attractions. Already playing in Washington Dulles International Airport and Houston George Bush Intercontinental Airport, the seven-minute video will soon be released to other major international U.S. airports.
“You can be secure and welcoming at the same time,” concludes Rasudo. We should be having a boom.”
Welcome: Portraits of America video: http://www.youtube.com/watch?v=2NpHwYrIXWY .
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