Video: LIIC members bullish on tax-reform effects
 
Video: LIIC members bullish on tax-reform effects
13 FEBRUARY 2018 9:30 AM

Operators, investors and brokers on the Lodging Industry Investment Council shared their rosy outlook on U.S. tax-code reform and how they see it boosting demand and corporate spending. 

LOS ANGELES—Members of the Lodging Industry Investment Council agree for the most part that U.S. tax-code reform will spur hotel demand in a good way and have other positive effects. However, some uncertainties still linger that they say only time will resolve.

During the group’s meeting ahead of the Americas Lodging Investment Summit, Hotel News Now asked members how they have seen tax reform affect their businesses so far and what they expect for the rest of 2018.

Later on during the LIIC meeting, participants shared more details about the short-term effects they have seen related to tax reform.

“It’s already affecting our business, by the marketplace having such confidence,” said Pace Cooper, president and CEO of Cooper Hotels. “We’re definitely seeing in our group business a confidence coming with tax reform. It’s been that link that’s been the big driver over the last 60 days.”

Most participants agreed that corporate liquidity should serve as a net positive all around for the hotel industry.

“Look at Apple, repatriating hundreds of millions—billions—of dollars back to the U.S.,” said Jim Butler, partner at Jeffer Mangels Butler & Mitchell and chairman of the firm’s Global Hospitality Group. “That capital is coming back to the U.S., and it’ll be available for investment. … I just see lots of money coming back to the U.S. that was formerly going out.”

Mike Cahill, CEO and founder of Hospitality Real Estate Counselors, made the link between corporate liquidity and more development.

“People are building new demand generators and because of that, we’re going to build new hotels,” he said. “It’s going to be an exciting time.”

Still, participants reminded each other that the effects might not all be positive.

“Personally, I haven’t figured out all of the impact,” said Rob Leven, chief investment officer of Procaccianti Companies and TPG Hotels & Resorts. “If you’re somebody who owns a lot of real estate in LLCs … there are changes in the tax code that will impact you. How it all washes out for us as real estate owners, I’m not exactly sure yet, but there is some impact there.”

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