As part of the Americas Lodging Investment Summit’s Patron sponsorship program, ALIS organizers asked AHT’s Rob Hays seven timely questions as we prepare for the 21st annual event on January 24-26, 2022, at the JW Marriott/Ritz-Carlton Los Angeles L.A. LIVE. Following are her responses.
You have been President and CEO of AHT since March 2020. What has been the most important lesson you’ve learned since taking the role and how do you apply that lesson to what’s happening in the current environment?
I have learned that you have to really trust the people you work with, particularly in times of crisis. We’re running every aspect of our business leaner than before, so this has been an opportunity for people to step into bigger roles and take on more responsibility. It has been a privilege to watch people rise up to the challenge and work together as a team to conquer obstacles. I believe a lot of good can come from going through a trial like this. Adversity can bring people together in a way that nothing else can.
What parallels can you draw between the hotel industry of today and your previous experience in the oil industry? What principals did you learn earlier in your career that have carried over to your current position?
My father lost his oil and gas company in the 80’s, so I remember the impact it had him and how he handled it. When I spoke to him last year about what our industry was going through, he told me to embrace the crisis, meaning try to appreciate what it is teaching you along the way. In real estate, just like energy, you’ll probably have a moment once in your career where you may lose everything – but sometimes you have to stare into the abyss to find out what you’re really made of. So, I am striving to appreciate what the crisis is teaching me by rolling with the inevitable punches and celebrating the small victories along the way.
During an interview with Hotel News Now during ALIS in July you said AHT would try to reduce its leverage from the 60-percent range to the 40s. How are you going about that process as the industry continues to grapple with the recovery?
It is difficult to know exactly how to manage that process given the uncertainty of the current recovery, but we are slowly chipping away at it. We have de-levered by over $800 million during the past year through a combination of paying off debt, giving uneconomic assets back to lenders, converting preferred securities to common equity, and strategically raising cash. We will continue to look at these options, as well as others, such as selling assets or buying new assets with lower leverage over the next few years.
Please describe the current lodging REIT environment, and how do you expect that to evolve in 2022?
The current environment is operationally in a much better place than we were last year, but the recovery has stalled a bit since the strong months we had this summer. Stock prices have not yet recovered as much as we would like, and as a result I think there may be better risk/return opportunities for investors in the public markets in the near to medium term versus the private markets.
How do you see 2022 shaping up for the overall transactions market? Will REITs be active, and most notably, what will be AHT’s approach to transactions during the next 12 months?
I believe 2022 will be a very active transaction market, particularly because the debt markets are continuing to heal and may improve dramatically as people get back into their offices and business travel improves. AHT will be taking a measured approach to acquisitions as we still have to focus on improving our balance sheet. When we begin to go more on offense we will be focused on franchised, full-service assets in the top 25 markets, which is consistent with our existing portfolio.
Soft corporate travel activity has impacted your business even as leisure demand blossomed during the summer. What signs are you looking for to indicate that corporate travel is beginning to resume? What’s your estimated timetable for the return of such business?
At this time, our corporate bookings are continuing to improve but are not yet at a pace that gets us really excited. The booking window right now is really short, so it is difficult to get longer visibility into the timing of business travel. We are hopeful about business travel after the new year as many Fortune 500 companies have delayed their return to the office dates until then.
What’s the one takeaway people should know about Rob Hays?
I love my job and this industry, but they are not the most important things in my life. My faith and my family always come first, and I hope that by keeping my priorities straight that I can be a better leader, colleague, and friend to those around me.