In the face of a challenging market, lodging REIT Strategic Hotels & Resorts Inc. (NYSE: BEE) is focusing its efforts on customer retention, according to president and CEO Laurence Geller.
In a video interview with REIT.com at REITWeek 2012: NAREIT's Investor Forum, Geller discussed how his company is addressing the general air of economic uncertainty hanging over the market. Strategic Hotels' retention strategy is a key, he said.
"We work very hard on our existing customer base," Geller said. "It's really important, because that's a base that you've already paid for."
That strategy includes up-selling existing customers. Additionally, Strategic Hotels is aiming to acquire the business of "aspirational" travelers as they gain confidence, Geller said.
Geller noted that consumer confidence for leisure travelers appears stronger than it is among corporate customers. He said he feels that validates Strategic Hotels' strategy in the current climate.
Assessing the overall lodging market, Geller said he sees opportunities for growth in resorts, where the competition is less intense. He noted that the supply-demand dynamic in this area looks favorable for resort investors and owners.
"The most interesting thing about them is that they have no supply," Geller said. "Whereas an urban hotel could be built in potentially three to five years, it's probably a decade before we see a major resort."
In terms of geographic markets, Geller described Canada as a "sleeper." He mentioned that Strategic Hotels was fortunate to have exited Continental Europe a year ago. He also noted that cutbacks in European travel to the United would be on the way.
"I think the European cycle is a little problematic," Geller said.