Hotel, Restaurant CEOs Worry About Slowing Demand
The housing crisis and soaring energy prices are a concern for the hotel and restaurant industries, and CEOs are already feeling the effects.
With home values decreasing and gasoline around $4 a gallon, Jonathan Tisch, chairman and CEO of Loews Hotels , is concerned that travel will become an afterthought.
“We’re starting to see the middle of the country get a little bit soft, the coasts are still holding up for us…but it’s problematic,” said Tisch. “It will definitely have an impact on travel and tourism, especially in this country.”
It’s not just leisure travel that’s being affected, according to Bill Marriott Jr., chairman and CEO of Marriott International .
“In the United States, business is really soft on the weekends and is now beginning to get soft by business travelers during the week,” says Marriott.
However, Barry Sternlicht, chairman and CEO of Starwood Capital , says companies with an international footprint will be boosted by the growing middle class in places like the Middle East, Russia and China.
“The growth of travel is inevitable, and with a couple billion new consumers entering the market, there’s going to be a middle class that’s going to travel from these countries,” according Sternlicht.
In the restaurant sector, Julia Stewart, chairman and CEO of DineEquity (formerly IHOP), says a value message is the key to beating economic woes.
“The economy definitely has impacted the restaurant industry business as a whole, and market share is tough for all of us,” says Stewart, “but I think our message at both Applebee's and IHOP is value this summer, and I think that’s the focus, and we’re fortunate enough in both brands to have a real value message.”