Experts: Lots of Good News in Lodging

Hartmann, who kicked off the event, explained that "It has been phenomenal to see things turn around coming off a bad year." He pointed out that Q1 2010 numbers show growth not only in demand, but in occupancy as well. However, ADR is still lagging.

Asia is leading the pack in terms of global performance and RevPAR, according to Hartmann, whereas the Middle East has the most in the construction pipeline. In terms of where people are staying, urban markets lead the way. The Northeast, he noted is very strong, citing Atlanta, and he also said that Phoenix showed strong numbers due to convention center hotels.

As for the chains, Hartmann said that demand is growing on the luxury end, which he said is "partly due to discounted rates." His general projections are that demand will grow in 2010 and "overall, we are pretty bullish on the performance of 2010, especially coming off of 2009."

Mark Woodworth, an EVP at PKF Consulting, said that now is "actually a good time to be in the US lodging industry," echoing Hartmann's positive Q1 numbers. Demand, he explained, "was literally twice what we had forecast during the first quarter of the year," adding that he predicts it will stay elevated through 2010.

Woodworth's current forecast, like Hartmann's, is optimistic. "The recovery clearly has begun and might have already begun to accelerate," he said. "What better time to be looking in the lodging industry than now? We know we are at the bottom, which is a point of financial opportunity."

Kevin Donahue, an SVP at Midland Loan Servicing, was somewhat the rain on the parade. Defaults are still increasing, product is continuing to pile and the special servicers are at, or close to capacity in many situations, he explained. In terms of what he sees happening in special servicing, "there is some restructuring being done," he said. "You will continue to see more."

Donahue pointed out that "preservation of that existing debt makes sense in terms of hotels." At the end of the day, in his estimation, there are a lot of reasons for the downturn, but it is more about getting back to basics. One of those causes, he said, is that the CMBS market was "ignoring the underlying fundamentals of real estate."

The underlying fundamentals went out the window and it was just numbers on a page, Donahue continued. "I think underwriting standards will be improved going forward," he said. And even though he expects defaults to continue, which he said could continue at until at least the end of 2011 partly due to maturities coming up, "I think there is light at the end of the tunnel."

There will be an appetite from the investor side, he explained, "and it will be better-underwritten, better-structured and better-performing."