Whither the Hotel Industry: Tracking the Tribulations of an Industry Coping with Economic Turmoil
September 30, 2010: 6:00 PM - 9:00 PM
Ted Mandigo, president of TR Mandigo & Co Hotel Consultants and assistant professor at Kendall College in Chicago, and Don Massigli, hospitality industry consultant and specialist in the hotel industry, discuss the industry’s response to a decade of economic ups and downs by tracking industry patterns and explaining how it survived the recession as well as how it is coping with the current recession (2008 to present). Specifically, Messieurs Mandigo and Massagli will discuss recovery modes, including recession-based pricing and discounting strategies, properties in bankruptcy, delinquency, and other troubled assets, problem resolution and recovery, projects awaiting financing, and the latest national and international hotel roll-outs. They will also offer long-term projections on the industry’s future.
450 N Cityfront Plaza Dr,
Driving Directions:Chicago Booth has arranged with the AMC Theater-River East Self-Parking Garage for discounted parking at the following:
300 East Illinois Street (AMC Theater-River East Self Park Garage)
$6 after 3:00pm
Garage: Self Park Facility
Payment: Automated: at pay-stations by cash or credit card or upon exit pay by credit card only.
To receive discounted rate: Go to card validator at the first floor security desk of the Gleacher Center. The new system for the AMC Theater- River East Self Park Garage is automated: Insert your parking card in the validator and the new price will be automatically applied. You can also validate your parking ticket at any time between your arrival at and departure from the Gleacher Center. When you leave the lot, you will be charged for the lower $6.00 fee.
Garage is located next to PJ Clarks and below the AMC Theater.
Following 9/11 and the recession of 2001-2004, the industry had gradually recovered. By 2007, hotels throughout the world were experiencing a major boom, with high occupancy levels, rising room rates and significant numbers of business and leisure travelers. However, by the end of 2007, the global financial crisis had begun to impact hotel occupancy, depressing rates throughout 2008 and 2009. During this period, many hotel construction projects were either cancelled or deferred. At the same time, prices paid during the 2004-07 boom period seemed unreasonably high in the 2008-10 period. Moreover, many properties were financed with large amounts of debt; by mid-2010, a significant number of these had been foreclosed on by lenders.
An examination of downtown Chicago exemplifies this pattern: between 2008 and 2009, hotel occupancy rates decreased 9.67%, from 74.5% to 67.3%, respectively, while average room prices declined about 19%, from $207 to $167. The industry is recovering, however, with occupancy projected to rise to 70% by the end of 2010. Yet, the industry ($2.3 billion in annual revenues for downtown Chicago versus $100 billion for the entire US) faces many challenges, including a competitive landscape fueled by business and tourist travel but operating within a depressed and uncertain economy; rising health care costs and disputes about benefits; and union unrest. For Chicago, unions represent the 23,000 people employed in the downtown hotel market. Focusing on both national and local industry conditions, Mandigo and Massigli track and explain industry trends and developments.
6:00 PM-6:30 PM: Registration, Networking, & Onsite Cash Bar
6:30 PM-8:00 PM: Program
8:00 PM-9:00 PM: Networking & Cash Bar
Ted Mandigo (Speaker)
President, TR Mandigo & Co Hotel Consultants
Ted Mandigo is a founder and director of TR Mandigo & Co. Hotel Consultants and an assistant professor at Kendall College, Chicago. Ted has spent nearly 40 years providing consulting services to the hotel industry, including directing market studies used in financing, among others, the Ritz-Carlton; Fairmont, Swissotel, and Embassy Suites; and consulting to hotels such as the Drake, Hyatt Regency; W City Center, Sofitel, Intercontinental, Westin River North. He has also conducted studies for the private club industry, both in Chicago and nationwide, servicing local clients such as the Union League Club, University Club, Chicago Club, and Casino Club, among others. A charter member and founder of the International Society of Hospitality Consultants (ISHC) and a CPA, Ted’s previous work experience includes partnerships in accounting firms Pannell Kerr Forster and BDO Seidman. Since 1995, he has been president of his own consulting firm, TR Mandigo & Co., and is also a full time assistant professor at Kendall College, where he teaches a variety of subjects including: hospitality law; feasibility studies; revenue management; labor relations; quality service; management strategy; and real estate finance.
A frequent guest speaker for various hospitality organizations, Ted prepares and presents annual forecasts for such groups as the Chicago Downtown Hotel Managers and the Midwest and the Phoenix Lodging Conferences. He received his undergraduate degree from Cornell University School of Hotel Administration and his MBA from Loyola University, Chicago.
Don J. Massagli (Speaker)
Hospitality Industry Consultant
Don J. Massagli is a hospitality consultant and an adjunct professor at Kendall College, Chicago. He is a specialist in hotel, hotel conference center, and resort development as well as golf and club facilities. During his 30-year career in the hospitality industry, he has covered operations, marketing, development and consulting in all segments of the industry and has held senior management positions with nationally and internationally recognized hospitality, development, consulting and service companies. From 2001 to 2005, he was the executive vice president of the Mobil Travel Guide. Prior to that, he was the director of Price Waterhouse Cooper’s Global Hospitality & Leisure Consulting Practice in Chicago as was also a managing director of the Horwath Landauer Hospitality Group in Chicago. Additionally, he has substantial experience in the convention hotel segment, conducting market studies, developer selection and asset management for the 800-room Hyatt McCormick Place development and the 615-room Indianapolis Marriott convention hotel, among others.
Don holds a B.S. in Industrial Management from San Jose State University, and a B.S. in Hotel Administration from Cornell University's School of Hotel Administration, and is a member of the Cornell Hotel Society and the International Society of Hospitality Consultants (ISHC). He has been involved in numerous professional activities as a guest lecturer, including the Crittenden Development Seminars and Roosevelt University (past advisory board member), among others, and is an author as well as a contributing expert for numerous articles on the lodging industry and has made appearances on CNN and FNN.
Other InformationAbout the Consulting Roundtable
The primary objective of the Consulting Roundtable is to connect consultants with the industry’s best practices, most innovative approaches, latest market trends, and most dynamic leaders. Meetings are scheduled for the fourth Thursday of each month.