LAS VEGAS—The hospitality industry may have suffered through the economic down- turn as much as any commercial segment in 2009 with estimates 
of a 30% to 40% decrease in business, but that doesn’t mean the sector is without optimism. This was evident at the recent Hospitality & Design Expo in Las Vegas, where more than 6,500 attendees had the opportunity to view the newest products and cutting-edge ideas from the nearly 900 exhibitors.
Most exhibitors with whom FCNews spoke said they noticed traffic and overall energy was up at the show. Comments such as, “We had all the right people visit us at our booth,” “Many [architects and designers] had new and exciting projects to talk about,” or “Not only are we seeing light at the end of the tunnel, we may be slowly coming out of the tunnel all together” were echoed in various forms throughout the three-day event.
Paul Breland, executive vice president, Masland Contract, agreed the show had a different flavor from last year. “People who are coming to our booth are more intent on purchasing for particular projects vs. last year, when it was more of people just seeking information. There is more purpose to their visit.”
Hardwood flooring supplier DuChateau Floors, which was exhibiting at HD Expo for the second time, was getting plenty of mileage out of the show, according to Mitch Tagle, president. “We have been seeing a lot of architects and designers who are ready to buy and know what they want. They say, ‘I want this and this is how much I need. Get it to me next week.’ They have projects they are working on. You get immediate action at this show. You may not get a lot of repeat business, but they will keep your stuff on catalog in case they need to use it again. The idea is to get as many of those as you can.”
Although everyone agreed 2010 will not be a breakthrough year, exhibitors believe hope is on the horizon. “The pie is getting smaller as far as projects go, but we have been more than pleasantly surprised at the number of very large projects with which we are involved,” said Desiree Perkins, vice president of marketing for Shaw Hospitality Group.
According to Anthony Minite, president, Bentley Prince Street, business has come around a bit in 2010. “We saw a bit of an uptick while the industry was down about 7%.” He said Bentley picked up some market share because of its segmentation strategy, which extends to hospitality. “We have a nice niche business with some boutique hotels. We clearly we want to be ready with the tools and products that fit in when things start happening again. That’s why we’re here.”
And DuChateau has also been active in 2010. “We have seen a big uptick in hospitality over the last year,” Tagle said. “We probably have had 17 specs in the last three months. In some instances we have had a hard time keeping product in stock.”
So, what are companies fixed in the hospitality industry doing in a downtrodden economy? Two examples are differentiation and global diversification.
Differentiation
The HD Expo served as the vehicle for Shaw Hospitality to showcase EcoEvolution, the hospitality industry’s first 100% sustainable print base. “It’s what sets us apart from our competition,” Perkins said. “People are asking for it; they want it because it’s transparent. We also have third-party certification which helps, too.” Perkins explained that buyers are becoming more aware of sustainability and certification, and Shaw has made these a norm for its products. “It’s just expected,” she said.
For The Mohawk Group, Al Kabus, president, explained that Durkan, the company’s hospitality division, is setting itself apart this year by rolling out SmartStrand carpet made with DuPont Sorona bio-based fiber, which has been a huge hit for the company on the residential side. “We have been very successful ramping up significant volume in our residential business. We’re now taking that same proven technology and moving it into our hospitality and four commercial businesses.”
Offering a fiber that has a different look and feel over typical nylon, Kabus also cited its environmental attributes. “It is made with 37% renewably sourced material, requires 30% less energy to produce and reduces CO2 emissions by 63%. “We feel good about this fiber in both a green and performance sense.”
Masland’s Breland explained why product differentiation will win the day going forward. It’s related to the issue of funding for projects. “People have wanted to look at our products with a project in mind, but that project is on hold. When that project comes off hold, there is a budget issue that comes up where things become a lot more competitive, more price sensitive, more shopping of different vendors.”
Global diversification
Natural Carpet Company president Norman Marks said geographic diversification is mandatory. “For those who still do business in America, diversifying is the only way to stay alive and possibly even grow if you’re really good,” he said. “Many of those who sit around waiting for what used to be here in America will die on the vine. Unfortunately, the hospitality industry has been a spoiled market. For the past 20 years, people have been getting business without even trying.”
Marks credits his positive business growth to his aggressive pursuit of the global market. “We are not sitting here waiting for the U.S. to recover. We are going to up-and-coming and already existing markets like the UK, Southeast Asia, Middle East and we’re planting seeds in South America. A lot of people have gone out of business and many have no clue how to regain business. This is where proactivity makes the most sense. For those of us who are here, reinvesting is the right thing to do. More than that, it’s good to get aggressive and learn to do different things. Going outside of this marketplace is what needs to be done.”
The future
So what are companies projecting for the rest of the year and beyond? “I will be happy to be flat but I’m targeting to be slightly up, said Bentley’s Minite. “I think we beat the industry in the first quarter and I would be happy if we can end the year in that same format. I think there is still a lot of pent- up demand and people are being very cautious with the checkbook. I think we’ll see positive trends for each quarter. Going into 2011, we may see some turnaround. Whatever the case, it will without a doubt be better than what we had to deal with in 2009.”
-Melissa McGuire