• Berlin boosters may face difficult future

Optimism was the theme of this year's International Hotel Investment Forum held in Berlin last week, as operators, owners and investors looked forward to a promising combination of improving performance and limited new supply in Europe and beyond.
   But the question that refused to go away was estimating how long it would be before the sunny outlook was once again obscured by dark clouds.
   The 'innings issue' – guessing at which point we were at in a nine-innings baseball game – was raised again and again. The third or fourth innings – or quarter of rising revpar – seemed to be the consensus view of where the industry currently sits.
It was widely stated that, of course, the game does not have to be just nine innings long but none-the-less, the feeling was that there is 18 months to two years left in the current cycle before it slows.
   If such predictions prove accurate, then many of today's highly leveraged deals will begin causing pain. With interest rates heading up in the US, the Euro region and Japan, mortgage debt could soon begin to make itself felt.
The gloomiest person on a podium was Derek Scott, economic adviser at KPMG. As an economist – a profession often called the dismal science – pessimism might be expected.
   But he was unusually so. "The risks are on the downside and potentially more serious than they have been for some time," he said.
Maybe he is simply the Yin to the bulls- Yang. Or maybe he is right.

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