We began this evening's session with a discussion of overall trends in the travel industry. The specific subject was the changing nature of business travel. If the trend is continued scrutiny of operating expenses and continued emphasis on efficiency, will business travel keep declining over time or will the trend somehow change? If business travel continues to wane, how does this affect the hospitality industry?
Certainly, different hotel or hospitality companies position themselves differently in terms of their target markets. Still, the business traveler has long been the bread and butter of the travel and hospitality industry. To the extent that business travel fails to recover to pre-crash levels, the hospitality industry players that thrive will either reposition themselves to appeal to a different customer, redesign their offerings to create better value for the business customer in order to achieve a greater share of a shrinking market, or (more likely) a combination of both.
Travel trends include a number of interesting facets. Mode of travel may be shifting, as well as average distance. This would lead to greater importance for rail travel, as opposed to air travel. Florida has received stimulus money to begin development of a high speed rail corridor, and Florida's biggest hospitality and entertainment company - Walt Disney, Inc. - has made a play to be a part of it all. Specifically, Disney is offering financial support on construction of a rail stop near its resorts, only stipulating that it will have approval of design and have the operating concession for the station.
We also discussed the impact of the BP disaster on hotels and the hospitality industry on the Gulf Coast. While the question was posed as to the effect of poor media publicity on the fortunes of hotel owners and others along the Gulf Coast beached, I could not help but wonder at the narrative, and its validity. Certainly there are many thousands of business owners badly affected by the decrease in tourism to the area, but that is hardly a mere function of a poor media induced perception of oil fouled beaches. The Deepwater Horizon spill is very nearly unprecedented in scope, exceeded in sheer volume perhaps only by Ixtoc in the Bay of Campeche, and in an area with far more widespread and intensely developed tourist dependent infrastructure.
Status of real estate in China and potential for the breaking of a real estate bubble.
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