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This week in Opportunities:

Hotel Management Fees Rise with Help of Incentives
Hurricane Season Not Likely to Affect Summer Vacation Plans
Survey: Execs Think Positive Investment Climate Will Continue
Executive Movers! See who's going where?
Travel Executive Employment Report

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OPPORTUNITIES NEWS & TRENDS

Hotel Management Fees Rise with Help of Incentives

U.S. hotel owners paid management companies 8.9 percent more to operate their properties in 2005 than they did in 2004 according to the recently released 2006 edition of Trends in the Hotel Industry published by PKF Hospitality Research (PKF-HR), an affiliate of PKF Consulting. This increase in management company compensation occurred during a year when hotel revenues grew 8.8 percent, and profits jumped 15.5 percent. 40 percent of the hotels reporting payment of an incentive management fee in 2005 did not report one in 2004. The growth in profits from 2004 to 2005 was 4.1 percentage points greater for those hotels that paid an incentive fee versus those that did not. Put a different way, while hotel owners paid an additional $400 per available room in incentive management fees in 2005, the increase was more than covered by the $2,280 per available room rise in profits. Profits are defined as income after management fees, property taxes, and insurance, but before capital reserves, debt service, rent, income taxes, depreciation, and amortization. Management fees is just one of the 200 discrete hotel revenue and expense items captured by PKF-HR for its 2006 Trends in the Hotel Industry report. This year's sample draws upon year-end 2005 financial statements received from more than 5,000 hotels across the country. Hotel management fees typically consist of two components -- a base fee and an incentive fee. More often than not, a base fee is charged as a percentage of total revenue. In addition, a growing number of management contracts now include an incentive fee that is paid to the management company once a certain profit threshold is reached. The amount of the incentive fee is usually based on a percent of the profits. Of all the hotels that participated in the PKF-HR Trends survey, 54.7 percent reported paying management fees in 2005, but only 11.1 percent paid an incentive fee. For those that did pay management fees, 61 percent of the dollars went towards a base fee, while the remaining 39 percent was paid out for incentive fees. Based solely on the sample of properties that paid an incentive fee, the base fee portion grew 6.4 percent from 2004 to 2005, while the amount paid for incentives fees grew a healthy 56.2 percent. For more information on the 2006 Trends in the Hotel Industry report, visit www.pkfc.com/store.

Hurricane Season Not Likely to Affect Summer Vacation Plans

According to a recent TripAdvisor survey of more than 3,000 travelers worldwide, 89 percent of travelers said their vacation plans have not been affected by predictions for another unusually active hurricane season in 2006. Fifty-eight percent of travelers plan to visit a hurricane susceptible destination this season and 57 percent of travelers would be inspired to visit the Caribbean during the heart of the hurricane season -- for a significant savings on transportation. While travelers are planning to visit tropical destinations this summer, it seems they have not altogether forgotten the brutal hurricanes of 2005. Among those traveling to a hurricane susceptible destination, 63 percent are likely to purchase hurricane cancellation protection or travel insurance. There are also concerns that lightning may strike twice, as 84 percent of respondents said they will avoid those destinations most devastated by last year's storms. Twenty-seven percent of travelers said they consider the gulf coast region to be the greatest hurricane risk this year, more than any other destination. Only 18 percent of travelers considered the gulf coast the greatest risk last year, before Katrina. Compared to the same one-month time period last year, research on TripAdvisor for the Caribbean, Florida and the Gulf Coast is down across the board in 2006. New Orleans was ranked #12 this time last year and has plummeted 100 places to #112 this year. Other examples include Florida, which dropped from #62 to #123, and Cancun, which dropped from #3 to #7. That said, Orlando jumped up one spot, from #11 to #10.

Survey: Execs Think Positive Investment Climate Will Continue

The positive hospitality investment climate will continue for at least the next two years (53%) and urban environments will see the greatest investment activity in the next 12 months (49%), according to a survey of senior executives attending New York University's 28th Annual International Hospitality Industry Investment Conference, held last week. With 1,700 participants attending this year, the NYU Tisch Center for Hospitality, Tourism and Sports Management sponsored conference is the largest of its kind focused on the real estate, finance and development sectors of the hotel and travel industries. Attracting top executives over the years, 12% of Conference attendees were Chairmen/CEOs, Presidents (10%), VPs (30%), Managing/Executive Directors (25%), Partners/Principals (12%), CFOs (5%), COOs (5%) and Owners/GMs (1%). Over 95% of those surveyed stated brand has significant or extremely significant impact on shareholder value. The threat of terrorism continued to be seen as the top threat (29%) facing the global hotel industry during the next twelve months. Energy costs followed with 16%, acceleration of new construction (15%), economic slowdown with rising interest rates (10%) and labor costs and pandemics each received 7% of the vote respectively. More than 25% of respondents thought the biggest challenge facing the hospitality industry through 2010 was shortage, cost and other related labor issues. Other key findings include: With regard to selling hotels in the next 12 months, interestingly, 38% would not sell in the U.S. and 65% would not sell outside the U.S. Concerning purchasing hotels in the next 12 months, 23% would not purchase in the U.S. and 41% would not purchase outside the U.S. Thirty-nine percent selected Private Equity Funds as the most active buyer group in the next 12 months, followed by public and private REITS (24%), private owners (17%), opportunity funds (14%) and public owners (7%). The Power of Connecting and Comfy Beds ... high-speed Internet access (22%), broadband wireless Internet access (21%) and upgraded bedding (21%) were winning hotel attributes when traveling for business.

OPPORTUNITIES EXECUTIVE MOVERS!

HOTELS & RESORTS: Marshall Management, a mid-sized hotel management company, has announced that it has added two key executives to its senior management team. Benjamin N. Seidel has joined the company as executive vice-president, and Patrick Welton was appointed director of revenue. In his new position, Seidel will oversee the day-to-day operations of the management company, including property-level accounting and financial reporting. He also will have operational responsibility for a portfolio of individual properties. Prior to joining Marshall, he was senior vice-president of development for the Waterford Group. Seidel is a former senior vice-president of operations for Philadelphia-based GF Management and held a number of management positions at the property-level. He received his Bachelor of Science in Education with a minor in Business Accounting from West Chester State University. Welton will oversee revenue management for each hotel in the company's management's portfolio, including room price strategies, monitoring of and pricing on all appropriate Web-based outlets, yield management and compliance with franchise directives. Most recently, he was regional revenue manager for the Staybridge Suites brand. Additionally, he has held senior-level property management positions with La Quinta Inns and Ramada Inn & Suites. Welton earned a degree in psychology from Central Florida Community College...Officials of Noble Investment Group, owner/operators of luxury, and premium branded hotels, has announced two key leadership appointments to its senior management team. The company named James E. Conley, Jr., CPA, as chief financial officer and Paul Burke as executive vice president of operations. As chief financial officer, Conley is responsible for the financial functions and oversight of all of the company's assets, including legal, administration, risk management, audit, tax compliance, internal and external reporting. Previously, he was senior vice president, hotel finance, for Wyndham International, overseeing all financial, accounting and risk matters for the company's hotel portfolio. A Certified Public Accountant (CPA), Conley received his B.S. in Accounting from Arizona State University and his M.B.A from Southern Methodist University in Dallas, Texas. In his new role as EVP of operations, Burke oversees the operations of Noble's portfolio of full-service hotels, resorts, convention and conference centers, and fine dining operations. Prior to joining the company, he was president of operations for Interstate Hotels & Resorts, the nation's largest independent hotel management company. He has held a number of senior operations leadership positions within the industry, including area director of operations for the southeast for Starwood Hotels & Resorts. He received his B.A. in History from Concordia College in New York and a M.B.A. in Management from Fairleigh Dickinson University. He is a member of The American Hotel & Lodging Education Foundation...Las Vegas Sands Corp. has announced that the company has made an addition to its executive team. Robert Rozek, who for the past five years has been an executive with Eastman Kodak Company, will join the company as Chief Financial Officer. He also will serve as the company's principal accounting officer. Rozek has held a variety of positions at Eastman Kodak Company, including having served most recently as Director & Vice President of Finance Operations and Vice President, Corporate Finance Group. Prior to his work at Eastman Kodak Company, Rozek was a Partner at PricewaterhouseCoopers LLP. Rozek's hire will allow Scott Henry, who has served as Chief Financial Officer for the past twenty months, to focus more heavily on the company's relationships with the banking community and its on-going financing needs. Henry assumes the position of Senior Vice President, Finance and will continue to report to the company's Chief Executive Officer.

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