PHOENIX-“The market will not cover the dumb things we havedone,” Jack DeBoer, founder of Residence Inn, among others, warnedthe audience at the 2010 Lodging Conference. As the lunchtimespeaker, as well as recipient of the Above and Beyond award at thisyear’s conference, DeBoer joked about the current crisis and warnedof its implications for those in the room.

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“Absolutely not,” he explained was his response to the questionof a double-dip recession. “We’re not out of the first one yet.”The iconic “father of extended stay” noted that there have beenthree times within the last century the U.S. has suffered underterrible economic turmoil.

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The Depression, he said, was brought about by the U.S.restricted open trade and other countries turning their backs onthe country. The second in the 1970s he blamed on the decoupling ofthe dollar from gold. This current crisis, however, he explained isdue to “our own excesses.”

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“Don’t kid yourself,” he repeated over and over. “Developmentfees are gone. Those days are over.” DeBoer explained that there isdevelopment money out there, but you have to figure out the cost atwhich you’re willing to acquire it.

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He explained that his own company, now operating the Value Placebrand, was driving to reduce costs for development by 25% and herecommended everyone adjust the numbers in their heads accordingly.“Take IRR out of your vocabulary,” he recommended, driving home thepoint that it was time for a mental adjustment as well as amonetary one for developers.

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Referencing his days building Residence Inn’s brand and shape,he related a few anecdotes that relayed insight into some of themore successful ideas, such as free breakfasts and inexpensivecupboard items for his brands. “I was talking to Jim Shore atHilton and asked how much money he does for breakfasts. ‘$1billon,’ he said. ‘How much do you make?’ I asked him. ‘Nothing.’”he related. “I wondered, it’s probably cheaper to give food away ina hotel than to sell it.”

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And in regard to the less expensive cupboard items and minibars,he remarked, “I wonder how much money we spend trying to keeppeople honest.” DeBoer explained that he figured, if you chargesomeone five dollars for a coke, they’ll pay for a cheaper one andswitch it out with yours before your sensor can catch them, but ifthey pay twenty-five cents for one, they would just as soon drinkthe one from you and pay for it. His point was not to incentivizepeople to steal from you.

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Finally, the elder statesman imparted some of his 80 years ofwisdom. Regarding business, he explained that a lot of people getcompetitive in business. Ego was a hug motivating factor for a lotof people, but he explained, there is “only one reason to be inbusiness folks, and that’s for the money.”

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He joked, “I’ve been rich and I’ve been poor and I like rich awhole lot more.”

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DeBoer related a personal experience he had, when he wentcompletely broke after turning down a $100-million offer for hisbusiness, simply because of his ego. Again, he emphasized trust andprofit in his personal and business dealings.

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“I have never been sued by a franchisee and I’ve never sued afranchisee,” he explained. This was, he insisted, because therewere only three parts of any franchise agreements that he evercared about: “Make money, make money and make money. Everythingelse is (expletive).”

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Simply, he expressed a few of his life lessons that he imploredhis audience to take to heart. Honesty, personal relationships, andgiving back were the things that would last over all other thingsin business. Noting that if you were healthy, had money and werefree, then you fell into one of the smallest minorities on theplanet.

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“Do you have any idea how bright the future is for all of ushere?” Hammering the point home, onstage, he matched an earlier$5,000 donation made to a hospitality scholarship fund promoted bythe Lodging Conference.

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