Spa Talk (very little so far) at the Lodging and Investment Conference Here in LA

Spa Talk (very little so far) at the Lodging and Investment Conference Here in LA
By Susie Ellis

A sea of blue suits….that’s what this American Lodging and Investment Conference looks like here in LA. I flew in for the conference a few days ago and just completed day one. People had recommended I attend since it is such a well run event and akin to our spa industry. Also, it is totally business focused and a good event to observe in preparation for the upcoming Global Spa Summit where executives gather for similar conversations.

Here are my observations so far:

1. Record attendance – almost 3,000 people. My guess is that out of that number there are maybe a few hundred women (and many I met seem to be from the investment side). Very male dominated. This morning I read an article about the glass ceiling for women at the executive level in the hospitality industry. Likely, it has much to do with the workaholic hours required. It is clearly not a myth.

2. Some stellar speakers – including Gene Sperling, Former White House National Economic Advisor and Former Director of the National Economic Council, and the heads of various research firms – all giving their predictions of what the lodging industry will likely encounter this upcoming year.

3. In summary, they aren’t predicting a major recession but a major correction; that the luxury end will fare much better than the lower end with economy hotels being hit the hardest.

4. The general consensus in the lodging industry is to NOT LOWER RATES when turbulence happens. I guess they learned this after 9/11. Many hotels lowered rates and it cut into their profitability. As one analyst said, when people decide to travel and book a hotel…they are definitely coming so no need to lower the rates. Their decision to come has more to do with other factors therefore lowering rates only cuts into your profitability.

5. The talk here is all about numbers. Everything comes down to the bottom line. Occupancy, revenue per available room night (RevPar) and average daily rate (ADR) are the three key numbers mentioned most often. Everyone knows them and can compare how they are doing with others. Investors are looking at the numbers. Decisions are made based on the numbers.

6. One of my major conclusions is that one of the smartest things the spa industry could do to become more visible in the lodging and investment community is to establish benchmark numbers. This was one of the initiatives at the Global Spa Summit last year and with Ann McCall from the Fairmont spas and Andrew Gibson from the Mandarin Oriental spas heading up a task force to get this done. I think it will actually happen by the 2008 GSS this May. Many people contributed along the way, Judy Singer and Patti Monteson from Health Fitness Dynamics, Starwood is being very helpful, Cornell, etc. Jan Freitag from Smith Travel Research is working on the project and will present the results at the upcoming GSS. It is going to take everyone in the spa industry to get on board with the benchmarks…but this will clearly benefit everyone.

7. Green is everywhere in conversations, breakouts, special sessions, etc. To my surprise however, when speaking with Richard Dusseau from Spa Strategy,he said that this is the first year that the green issue has really been visible!Apparently many members of the hotel and investment community haven’t been very supportive due to the extra costs involved; however, they have now turned the corner and realized that when looking ahead, if their buildings aren’t LEED certified, they are likely to have a hard time making profits down the road.One gentleman mentioned that the green issue is a bit like taking smoking out of restaurants.At first people were aghast at the idea so they had smoking sections.Then smoking was banned from restaurants, then smoking was banned from cities, then smoking was banned from states, etc.And we all adjusted very well along the way.

Well…on to day two. With all this business focus, I may have to book a massage at the new Equinox Spa in the area. I miss the ying/yang balance of spa conferences. This one is definitely all yang.

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