GlobeSt.com: The message I'm getting is that even if there is a recession--and an increasing number of people are saying it's here--the hotel sector shouldn't feel it greatly. Why not?

Fishbin: A couple of reasons. When we look at demand we also look at the economy and demographics, and there are reams of statistics out there focusing on the age and wealth of our population, their aspirations and leisure experiences. There are a number of factors that support the demand for travel. On top of that--and this favors key cities and resort markets--is the devaluation of our dollar, so international travel plus domestic demand strongly favors the continuation of demand for lodging. And one of the things that's different about this slowdown, and we are calling it a slowdown rather than a recession . . .

GlobeSt.com: . . . And you're holding by that even this late in the day . . .

Fishbin: Yeah, there's a lot of data out there to help identify the trends in bookings and such. But one of the things that's different going into to this slowdown is that we don't have the hangover of new supply that we did in other shifts in the cycle. Supply has been strongly constrained, and it creates an opportunity for existing hotels to hold, if not somewhat increase, their rates, albeit not what we've seen over the prior few years. On an overall basis, occupancy levels will be flat, and room rates will continue go up.

GlobeSt.com: Are we talking about particular segments of the market that might be immune--if that's not too strong a word? Are there some that are more exposed?

Fishbin: We don't show that any are immune. All will be somewhat impacted but at different levels. The segment we see with the highest growth in RevPAR is luxury.

GlobeSt.com: Let's talk about this lack of overhang. Is it discipline?

Fishbin: There's more discipline in underwriting and financing new projects. Another reason is that, until recently, competitive or alternative uses--for-sale residential and office in places like New York--have won out. The other trend we're seeing in urban markets is boutique lifestyle product--200 rooms as opposed to 400 or 500-plus rooms. So it's the financial discipline, the competitive uses and the change of size and positioning.

GlobeSt.com: Last year was really a milestone in terms of M&As generally, but it hit the hotel sector in a great way. To what extent does this relate to lodging's stability?

Fishbin: There's definitely a correlation. The acquisitions we've seen from the large private-equity firms and the interest from the sovereign-wealth firms are all tied into the demographics and fundamentals we've reviewed. Certainly through the first half of '07 there was very favorable credit financing that was available to assist with these acquisitions. That element of the industry obviously went away. But there's still a very favorable view to the hospitality industry, and history has proven that on a risk-adjusted basis hotels are highly favored within the spectrum of real estate assets classes. Also, it is a truly global segment, and the large investment funds, private-equity firms and sovereign-wealth groups are very interested in global platforms, such as you saw with the Hilton deal.

GlobeSt.com: Does the acquisition by a major player allow them to circumvent some of the debt-market problems?

Fishbin: A large investment group not so reliant on the debt market would have opportunities in this window we're in, opportunities to find transactions that were more highly contested. The playing field might be a little less intense. But there's also the view on the capital side that a lot of these organizations bring tremendous relationships as well as access to capital and to best-in-class developers and other synergies that would be accretive to the platform they are working on.

GlobeSt.com: What's the most significant trend impacting the market right now? Is it the crisis or the M&As?

Fishbin: We're focused on all the things we discussed but the thing we haven't discussed is branding. There are a lot of new brands that have been created in the past 18 months or so and they're very focused on generating revenues and premiums through the power of the brand, and it's beyond real estate opportunities.

GlobeSt.com: Are we overbranded?

Fishbin: Not yet.

GlobeSt.com: You hesitated.

Fishbin: Well I would say in some segments we are. In the mid- and upscale segment we're over-branded. But there are new brands focusing on that new demographic, and those brands that have done well will win out over the older brands that need to reinvent themselves to stay relevant. Time will tell.