Econometer: Should the US be run like a business?
Question: Should the U.S. government be run like a business?
Bob’s Answer: YES
The government should be run like an effective, efficient non-profit business. Zero-based budgeting and a mindset of working within that budget will go a long way toward eliminating waste.
The government model that we currently have in place is not receptive to change or improvement.
This is seen across local, state and the federal government. As all of us who have dealt with government-run agencies know there is need for improvement.
Hotel Industry Forecast: 2017
The big news in 2016 was Marriott’s merger with Starwood and provides the new company with over 1,000,000 hotel rooms in 5,700 hotels, 30 brands and huge bargaining power with online travel agencies. The second was the Republican sweep—President Donald…
Is San Diego headed for a luxury-hotel glut?
Question: Is San Diego heading for a luxury-hotel glut?
Bob’s Answer: NO
There are fewer luxury hotels in San Diego as a percentage of total hotels than Los Angeles and San Francisco, and San Diego pales in comparison to pipeline deals in Los Angeles’ downtown. Most new hotels entering the market are focused-service hotels. These hotels, in many cases do not have room-service, restaurants or significant meeting space.
Further, many planned hotels will never get built due to challenges with debt, equity and timing.
Lodging 2017: Decreased Volume, Shifting Capital Sources
DEL MAR, CA—With Chinese investors facing difficulty in getting their money out of the country and other headwinds the hotel industry is facing, sales volume is projected to decrease this year, but there is still opportunity, speakers at RAR Hospitality’s 10th Annual Lodging Industry Forecast here Friday told the 153 attendees, a record-breaking number. The breakfast event was split into two panels: the first, an economic forecast and predictions on how the economy will affect the hotel industry this year; and the second, a look at evolving travel expectations and how the industry can meet them.
Bob Rauch, CEO and founder of RAR, moderated the first panel.
He started off by saying the economy is strong, and we may have even just avoided a recession. “Brexit is not a big problem globally,” like many thought it would be, he said. “If the economy is good, lodging is good.”
Rauch said there’s not much new hotel supply right now, but the market needs to
drive RevPAR growth in order to keep costs in check.
Alan Reay, president and founder of Atlas Hospitality Group, said while there are more than 100,000 new hotel rooms in planning in California, they won’t all get built.
“We’re seeing a lot of new product coming into the market, and they’re in danger of overbuilding in Downtown L.A.” This is not a concern for San Diego, which has kept hotel development in check, with only six projects opening this year throughout the county, but Downtown L.A. is in need of enough hotel rooms to service its convention center. While many traditional hotel lenders have pulled back on construction lending, Reay said private equity is filling the gap.
Rauch asked the panelists where developers will find debt and equity to build, and Guy Maisnik, partner and vice chair of JMBM’s Global Hospitality Group, said while CMBS has been out, borrowers are looking at banks, private capital, foreign investment (which is dropping), EB-5 funds, life companies (although there aren’t many of these in hotel construction since they are typically conservative) and specialty funds. “It’s harder today [to get construction financing] because land values are so high—they’ve tripled since 2010—so only the significant players can get into the market.” Reay agreed that it’s getting
much tougher to complete hotel financing and acquisition in the current market.
2017 San Diego Lodging Forecast
San Diego is known for its mild year-round climate, tourist attractions, Convention Center, U.S. Navy and its more recent developments as a healthcare, biotechnology and communications technology development center. San Diego County has a population of…
Lodging Forecast: How Long Can Post-Recession Uptick Last?
By LOU HIRSH
Sunday, March 26, 2017
San Diego County’s lodging and tourism industries have been on a tear for the past six years. Can they go for a seventh in 2017?
The local region in 2017 is expected to maintain its highest hotel occupancy levels seen in the last 30 years, at least matching its lodging performance of 2016, according to the latest forecast from San Diego’s RAR Hospitality Inc.
At the LIFE Conference on March 24, CEO Robert Rauch said barring an unforeseen terrorism-related or other “black swan event,” the national tourism economy should remain strong in 2017. The San Diego region’s tourism and lodging fundamentals generally fall in line with what’s happening nationally, and local metrics have generally been improving year-over-year for the last six years straight.
Rauch said the 2017 forecast calls for a regional occupancy rate of 77 percent — on par with 2016 — with an average daily room rate of $160 and revenue per available room (RevPAR) of $123. The room rate and RevPAR numbers, if they come to pass, would both beat 2016 metrics.
According to panelist Alan Reay of Atlas Hospitality, “there are currently no signs of overheating conditions in markets such as downtown San Diego, where several projects meeting pent-up demand were recently completed or are underway.”
Can philanthropy fill R&D grant gap if feds back away?
Question: Can philanthropy fill the gap left by reduced federal research grants?
Bob’s Answer: YES
Philanthropy already plays a significant role in scientific, engineering and medical research in the U.S. Over billion annually is contributed to operations, endowment and buildings for research.
When combined with endowment income, university research funding from science philanthropy is billion annually.
This major contribution to U.S. scientific competitiveness comes from private foundations and gifts from individuals. We must increase this even further to fill the gap left by reduced federal grants.
San Diego experts weigh in: Do U.S. trade deficits really matter?
36 billion yuan trade deficit in February, activity at as factories and ports slowed during the Lunar New Year holiday.
(STR / AFP/Getty Images)
Question: Do trade deficits matter?
Bob’s Answer: NO
It’s not worth worrying about a trade deficit because it just means we import more than we export. While we have a large current trade deficit with China in particular, a strong economy is more important than a trade surplus. Our current deficit is largely due to the strength of our economy.
While China’s policies create an even larger trade deficit, growing the economy should be our goal, not restricting trade or foreign ownership.