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This week in Opportunities:

Industry Positioned to Endure an Economic Slowdown
Airlines to Continue Rollout of Data Services
Opportunities Networking!
Executive Movers! See who's going where?
Travel Executive Employment Report

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OPPORTUNITIES NEWS & TRENDS

Industry Positioned to Endure an Economic Slowdown

Declining U.S. hotel occupancy levels should be more than offset by rising room rates in 2008 according to PKF Hospitality Research (PKF-HR). Given the recent dour economic news and talk of a potential recession, PKF-HR analyzed the historical relationships between key economic indicators and the performance of the U.S. lodging industry during times of economic stress. While a slowdown in Gross Domestic Product (GDP) growth may lead to moderation of increased demand for hotel rooms, a surge in inflation should allow hotel managers to boost their room rates. "When economic activity slows down and corporate profits begin to waver, one of the first expense items to get scrutinized is the company's travel budget," said Mark Woodworth, president of PKF Hospitality Research. "Leisure travel, on the other hand, tends to remain fairly constant. People may alter their personal travel plans in search of more modest accommodations, but they still want to take their vacations," Woodworth noted. According to Moody's Economy.com's January 10, 2008 forecast, the pace of GDP growth is expected to slow down to a 2.2 percent annual rate in 2008, but the Consumer Price Index (CPI) forecast has been adjusted upward to a 2.6 percent annual rate. A rise in inflation has both a positive and negative affect on lodging performance. "Unlike other forms of real estate, hotel price movements are not restricted by long-term lease agreements. Hotel managers have the ability to adjust their room rates much more quickly in response to an increase in inflation, and they have done so in the past," Woodworth observed. For 2008, PKF-HR is forecasting room rates to rise 5.6 percent, a full three points above the expected pace of inflation. "On the flip side, a rise in inflation leads to an increase in operating costs," Woodworth said. Due to heavy labor requirements and relatively low levels of automation, hotels have not enjoyed the productivity enhancements experienced by other industries. Hotel operating costs typically outpace the rate of inflation. "We reiterate our guidance about closely monitoring operating expenses in order to retain profitability in 2008." PKF-HR's projections for the hotel industry are based on its proprietary econometric forecasting model. The model utilizes historical lodging data from Smith Travel Research and economic forecasts from Moody's Economy.com. As of January 10, 2008 Moody's Economy.com was projecting a slowdown in U.S. economic activity, but the probability of a recession was only 14 percent. "What will keep the economy buoyant, as well as the lodging industry, is the continued growth in employment. Historically, we have seen a strong correlation between changes in employment and lodging demand," Woodworth observed. Reductions in demand and ADR are rare. Since 1988, the national ADR has declined from the prior year just twice. Same for total U.S. lodging demand. The only time demand and ADR both declined in the same year was 2001. "Given the depressing economic news, I understand why hotel owners, operators, investors, and lenders are all very concerned. Fortunately, the financial foundation for most U.S. lodging industry assets is much stronger today than it has been when entering historical recessionary periods. Therefore, we believe the industry is in a much better position to endure the expected economic slowdown," Woodworth concluded.

Airlines to Continue Rollout of Data Services

While passenger surveys continue to have a weak track record of predicting demand, both positively and negatively, the cost to supply wireless services to air travelers continues to fall. Airborne picocells have dropped in price along with their terrestrial counterparts, in spite of additional R&D investments in aeronautical systems to ensure that their logic and memory chips function properly at cruise altitudes. In turn, this has improved the economics, and reduced the weight requirements, of deploying passenger wireless systems on commercial airliners, according to a soon-to-be-released study from Freesky Research. While many airlines will deploy either 802.11 or 3G picocells, a large number will not go fleet-wide over the next four years. "For all the reductions in equipment costs, airlines are still reluctant to invest in systems that they cannot amortize over at least five years of flying," said David Gross, author of the report. "Well over half of the deployments will be on three aircraft families. Widebodies with over 10,000 cycles that fly highly profitable routes are still seen as questionable places for GSM and Wi- Fi installations. Additionally, CRJs remain a particular challenge, because there is strong reluctance by both large airlines and their regional partners to install a wireless system on a jet that could be flying under different colors in 2010." GSM picocells will roll out quickly on aircraft registered in European, Asian, and Middle Eastern countries, with text messaging remaining one of the most cost-effective connectivity services airlines can offer. Wi-Fi picocells have already made significant inroads with crew applications, particularly for updating approach charts and for accessing management networks while parked at the gate. However, some airlines will continue to use Wi-Fi for cabin surveillance and for Flight Operations Quality Assurance (FOQA) without deploying passenger systems.

OPPORTUNITIES NETWORKING!

Green Hotel Development, Renovation and Operation - UNLV-JMBM Hotel Developers Conference

The UNLV-JMBM Hotel Developers Conference, co-sponsored by The Harrah Hotel College at the University of Nevada Las Vegas (UNLV) and the Global Hospitality Group at Jeffer, Mangels, Butler & Marmaro LLP (JMBM), announced the first conference devoted solely to green hotel development, renovation and operation. Current registration suggests more than 500 hotel owners, developers, and lenders will attend the conference, which will take place March 11 - 13 at the Green Valley Ranch Resort and Spa in Las Vegas. Keynote speaker Daniel C. Esty, Director of the Center for Environmental Law and Policy, Yale University, is a leading expert in the relationship between the environment and corporate strategy. His address will draw on information gathered for his recent book Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value and Build Competitive Advantage, explaining how leading-edge companies have successfully incorporated environmental thinking into their core business strategies. Tom Paladino, a recognized leader in the green building industry and president of Paladino & Company, will also give a keynote address, based on his hands-on experience with green development. A significant contributor to the development of the LEED Green Building Rating System, Paladino has consulted on more than 300 sustainable building projects, including those for major market leaders such as PNC Financial Services, Microsoft, Candela Hotels and The Rand Corporation, among others. Visit www.jmbm.com/thdc to see a full line up of the speakers, to register or to become an exhibitor or sponsor.

OPPORTUNITIES EXECUTIVE MOVERS!

AGENCIES: LeisureLink, Inc., of Pasadena, CA, has announced the appointment of Michael O’Connell as its Vice President of Distribution, overseeing the company’s relationships with its GDS and OTA partners, as well as guiding its growing network of web distribution partners. O’Connell came to LeisureLink from Pegasus Solutions, where he was responsible for managing Pegasus’ business partners around the world and expanding its presence in emerging markets. A native of New York City, O’Connell holds a bachelor’s degree from Georgetown University in International Relations.

AIRLINES: South African Airways (SAA) announced new sales directors for its Western and Northeast regions in North America. Paula Newton is director of sales for the Western Region, based in the Los Angeles area. Katherine Jochen is director of sales for the Northeast, based in the New York City metropolitan area. As director of sales for the Western region, Newton’s territory will include California, Arizona, Nevada, Oregon, Utah and Washington. Newton joined SAA in 2001 and has held several management positions within the airline’s sales and marketing departments in North America. Most recently, she served as director of marketing events and promotions, responsible for negotiating and coordinating SAA’s participation in many corporate and community events and enhancing the airline’s brand position in North America. Prior to joining SAA, Newton served as director of sales – ethnic markets for Kartagener and Associates (KAI), a luxury travel marketing firm. Prior to KAI, she was president and founder of Natchez Travel and Promotional Services in Los Angeles. A California native, Newton graduated from Chico State University in California with a degree in Industrial Psychology. As director of sales for the Northeast region, Katherine Jochen’s territory will include New York, New Jersey, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine. Prior to joining SAA, Jochen served as market development manager in the U.S. for Ethiopian Airlines. A 25-year veteran of the airline industry, she has held sales positions with Air New Zealand, El Al Israel Airlines, LanChile Airlines and Air France. A New York native, she is a graduate of Eisenhower College in Seneca Falls, New York.

CAR RENTALS: Advantage Rent A Car Chairman Dennis E. Hecker has announced the appointment of Mick Anselmo as chief operating officer of Advantage, and Frank Dankovich as senior vice president of fleet operations. Anselmo, Advantage COO, was most recently president/market manager for Clear Channel Radio where he built and operated multiple successful radio brands. Dankovich joins Advantage from Chrysler Motors where he served as field operations manager having responsibility for vehicle sales and marketing for the Great Lakes Region.

HOTELS & RESORTS: RockResorts and Vail Resorts Hospitality have announced that Paul Toner has been selected as the new vice president of sales and marketing for RockResorts and Vail Resorts Hospitality. He will start his new position at the corporate office immediately. Toner brings more than 22 years of hospitality experience to his new position. He began his hospitality career in 1985 as a sales manager for the Key Bridge Marriott. From 1987 until 1992, he was the director of sales for the Boston Long Wharf Marriott and the Maui Marriott, respectively. For the next two years, he was the director of sales and marketing for the Hyatt Regency Kauai and then the Hyatt Regency Maui. He then accepted the position of director of association sales for the Orlando World Center Marriott in 1994. From 1994 until 1999, he was the area director of marketing for Kauai Marriott Resort and Beach Club. His career took on a more international scope in 1999, when he became the director of marketing Central/Southern Asia and Pacific Islands for Marriott Hong Kong. He returned to Hawaii in 2002, as the area director of marketing for Marriott Pacific Islands. Before accepting the position of vice president of sales and marketing for RockResorts and Vail Resorts Hospitality, he was the vice president of sales and marketing of Asia Pacific for Marriott based in Hong Kong. Toner graduated cum laude from Saint Joseph's University in Philadelphia, PA with a bachelor of science degree in food marketing... With plans for continued expansion, Omni Hotels announced the appointment of Austin Khan as vice president of acquisitions and development. In his new role, Khan will be responsible for identifying and evaluating new acquisition and development opportunities. He will oversee market feasibility analyses and assist with delivering the brand's long term expansion goals. Before joining Omni Hotels, Khan managed development and acquisition projects for OTO Development in Los Angeles. Over the course of his career, Khan's responsibilities have also included advisory roles for development projects in Asia-Pacific to the Real Estate Capital Markets group of Arthur Andersen, LLP. Khan received his MBA from Columbia University... MGM MIRAGE has announced several major promotions at the company's resorts effective March 3. Lorenzo Creighton, who, since 2005, has served President and Chief Operating Officer (COO) of New York-New York Hotel & Casino in Las Vegas, has been named President and Chief Operating Officer of MGM Grand Detroit Casino. Creighton will report to Jim Murren, MGM MIRAGE President and COO. George Boyer, most recently President and COO of MGM Grand Detroit Casino, remains within MGM MIRAGE, serving as a Senior Executive in MGM MIRAGE Development, a subsidiary of the Company. Cynthia Kiser Murphy, currently the Senior Vice President of MGM MIRAGE Human Resources, has been named President and COO of New York-New York Hotel & Casino. She is the second woman to be named by MGM MIRAGE to head a major Las Vegas Strip property, following Renee West, who was appointed President and Chief Operating Officer of Excalibur in 2005 and remains in that position today. Murphey will report to Jim Murren, MGM MIRAGE President and COO. Bill Hornbuckle's responsibilities have been expanded to include the role as President and COO of the MGM Grand Atlantic City development. He will also retain his current position as President and COO of Mandalay Bay Resort. On matters relating to Mandalay Bay, Hornbuckle will continue to report to Jim Murren, MGM MIRAGE President and COO. He will report to Ken Rosevear, President of MGM MIRAGE Development on matters relating to MGM Grand Atlantic City.

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