We just returned from the NYU conference. This is the biggest conference each year for hotels and it is basically meetings one after the other for two days. It’s like speed dating where you sit for 20 minutes with each buyer, make your sales pitch, and then you move on to the next one.
I use these conferences as the bellwether on how long the market cycle will last, and I try to gauge where we are in the cycle. I have been selling hotels for 24 years and have been through enough cycles to know the signs when you see them.
If everyone is having financial trouble and the mood is low, you can expect that the next several years should be favorable to transactions and hotel selling. This year at the NYU conference, the mood was euphoric, money was flowing, and the vibe was basically off the charts. Everyone was upbeat, happy and feeling invincible.
Each of the financial downturns I have been through all started soon after this type of a conference. So we at Hotel AG are battening down the hatches and attempting to close all the transaction we can this year. I hope all the smart folks are right, and I am wrong because that would mean that the economic outlook is solid for several more years. I would gladly be wrong if it meant several more years of a good transaction environment.
I believe business cycles are a lot like life. When you are doing well, you need to be saving money for when times are not so well; when you are healthy, you need to be appreciative of that season in your life. So often, people take a season of joy in their lives for granted and miss the opportunity because they never stopped to really savor the time. Just like in business, when things are right, you need to be humble and very aware that it will not be like this forever.
History is full of people, even wealthy people, that thought life would stay good for many years, and we all know how that ended. The greatest examples of leaders are the ones that prepare for the changes in life and move through those periods with grace and humility. KT