Black Meetings and Tourism

JAN/FEB 2012

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NABHOOD BY MICHAEL BENNETT LEAD STORY – FROZEN CREDIT MARKETS ARE BEGINNING TO THAW It's been over three years since the latest ice age began. That massive glacier of frozen credit markets that nearly swallowed the earth whole is finally receding. Unfortunately, receding glaciers don'tmove very fast, but they domove and this one is beginning to pickup momentum. As reported in the last edition of NABOOD NEWS, the major lenders are starting to get back in the game of lending. Andy Ingraham, president and CEO of the National Association of Hotel Owners, Operators and Developers (NABHOOD) says, "cash flow and deals are abundant." While it's still too early to tell how the sovereign debt crisis in Europe will impact the pace of lending, trend lines aremoving in the right direction. That's not to suggest hotel investors will enjoy a loosening of credit standards, but at least there is a willingness to invest thatwas not present just a year or two ago. Atremendous opportunity in the acquisitionmarket exists for savvy hotel investors who have spent the past few years positioning or repositioning their respective portfolios in anticipation of brighter days, especially in the United States. A combination of rising room rates and increased occu- pancy in the U.S., led by the business sector are up, making the acquisition sector especially attractive. Smith Travel Research expects RevPar (Revenue PerAvailable Room) to jump 4.3 percent in 2012. Many industry analysts believe investors; especially pri- vate equity funds, sovereign wealth funds and wealthy indi- viduals are ready to pounce on indebted properties or buy up properties from banks looking to liquidate some assets. Arthur de Haast, chairman of investment services firm Jones Lang LaSalle Hotels says, "people are expecting 2012 to be a pretty positive year in terms of demand for hotel accommodations and the ability to get deals done." The firmforecasts deals in theAmericaswill at aminimum match that of 2011 with total valuation estimated at $15 bil- lion. Foreign investors are finding the U.S. to be extremely attractive. The U.S. is considered safe and the dollar has per- formed well recently. As mentioned earlier, lenders are not just giving money NEWS away as loan to value ratios remain high at 30 to 40 percent – translation, cash is king. On a sour note, new-builds remain soft as tight credit con- ditions will continue in that sector of the market in the fore- seeable future. It's a combination of a glut in available prop- erties for acquisition and the cost of new-builds that will keep this sector of the market depressed awhile longer. Steve Joyce of Choices Hotels believes it could be 2014 or 2015 before any sustained new development takes place. That's not to say new-builds aren't getting done, it's just extremely difficult. In the next edition of NABHOOD NEWS we will report on one new-build here at home. MEMBER SPOTLIGHT Sheila C. Johnson is arguably one of themost successful entre- preneurs and philanthropists the world has ever seen. High praise for sure,but you cannot help but marvel at all she has accom- plished as Johnson continues on her impressive journey. We all remember Johnson as co-founder of Black Entertain- ment Television (BET), but her resume of entrepreneurial achievement across such a broad spectrum of business interests is unparalleled. She is the only African- American woman to have ownership in three professional sports franchises – the WNBA's Washington Mystics, the NBA's Washington Wizards and the Washington Capitals of the NHL. Johnson is also a partner in ProJetAviation, a comprehen- sive aviation service company, andMistral, themakers of fine bath, body and home products. But for readers of this publication,her biggest contribution comes in the area of hotel ownership and management. As CEO of Salamander Hotels and Resorts, LLC, Johnson has amassed an amazing portfolio of luxury properties. Her portfolio includes the Grand Golf Resorts of Florida, which features three golf and family resorts reaching fromthe Gulf ofMexico to theAtlantic. Johnson and her team are currently building Salamander Resort and Spa on 340 acres in the heart ofVirginia's fabled horse country about 30 minutes from Dulles International Airport. The resort,when completed in 2013 will feature 168 guest rooms and suites plus 11,000 sq. ft. of meeting space. SalamanderHotels andResorts is also part of an emerging trend as a hotel management firm. In a deal announced last Black Meetings & Tourism January/February 2012: 25

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