If there's a lesson all journalists have to learn at some point in their careers, usually in the earlier stages, it's that you can't let perfect become the enemy of good.
This should be obvious in a deadline-driven business like the news, but often people need a reminder that you can't sit on your hands forever as you wait for your brain to formulate that perfect lede and you can't just not share important information that the public has an interest in while you seek to transform an interesting story into a Pulitzer winner.
But this line of thinking is also truly applicable to the hotel deal-makers out there who have been waiting for one shoe or another to drop to get the transactions market rolling again. There have been early signs companies are back open for business when it comes to buying and selling — after an extended lull induced primarily by the Federal Reserve's interest rates hikes — but we're still not quite to the point that many hope we will be.
Whether you're waiting on interest rates reversing course — good luck with that — or a wave a distress that always seems on the horizon but never seems to fully materialize, there will always be a reason to feel like tomorrow will be a better investment environment than today. But with that in mind, it's somewhat novel to me to think about how the initial interest rate hikes last year brought buying and selling hotels to a screeching halt just because of the uncertainty it represented, but rates were significantly lower at that point then they are today. Funny how that works.
As many sources have pointed out to me in recent months, while interest rates are elevated compared to what we've grown to expect in recent years, they're not ridiculous by historical standards. And many of those same experts believe the so-called wave of maturities that is slated to crash at some point this year will be dealt with just like it always is.
If the industry's own diagnosis of itself — at least based on what we hear from the analysts and experts at our mother ship STR or on recent earnings calls — is correct, 2023 and most likely 2024 are going to be strong years for hotels, so why not invest in them if that's what you do?
I think the outlook in the industry is coming around somewhat to the opinion that deals must be done. Real estate investment trusts seem to be transacting and refining their portfolios based on new market dynamics. While the mega-deals we often wait for of REITs buying other REITs or being taken private by a mountain of private equity money don't seem to be materializing, a lot of companies have indicated they're out in the market looking for acquisitions. There's even some life on the brand acquisition front with Hyatt Hotels Corp. buying Dream Hotel Group.
So don't be afraid. Spend an absurd amount of cash and make all your hotel dreams come true.
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