Hotel experts presented forecasts and proposals on the current economic situation facing the hospitality industry at a recent regional conference, "Solutions for the Inhospitable Economy in the Hospitality Industry," at the Hilton Garden Inn, San Diego/ Del Mar.

Robert Rauch, Steve Hanover and Guy Maisnik gave a brief presentation on their area of expertise (hotel operations and ownership, consulting, and legal frameworks), and then opened the conference to questions and answers with more than 50 attendees.

Hospitality insiders showed a current, tragic loss of net income caused by the combination of supply increases, demand decreases, and resultant negative operating performance. This loss of net income directly relates to both cash flow problems and a dramatic reduction in values. The cash flow problem creates difficulty for hotel operators trying to meet their debt service requirements. It also forces hotel values to drop below the amount of debt on their property. Consequentially, the experts say there is a need for a "shared pain" approach to working out distressed hotel loans. This may include hiring of a consultant like Steve Hanover of Sequoia Capital or a lawyer like Guy Maisnik of JMBM. 

“Whether you require a management company, a consultant or a lawyer, this is not the time to approach a lender without a plan and without a team. The next nine months will be very difficult,” said Rauch. 

Rauch presented a forecast showing the third quarter of 2010 is exhibiting positive trends based on a pace report provided by Rubicon. He predicted better times for 2011. 

For more industry information, and to see the power point presentations, including hotel performance data on supply, demand, occupancy, rate and REVPAR, from the conference, visit hotelguru.com. Contact Robert Rauch at rauch@hotelguru.com. Contact Guy Maisnik at MGM@jmbm.com. Contact Steve Hanover at shanover@seq-cap.com. 

Pictured: Left to Right – Bob Rauch, Steve Hanover, and Guy Maisnik speak to conference attendees.