8/27/2020 | By Sarah Borchersen-Keto
RLJ Lodging Trust (NYSE: RLJ) President and CEO Leslie Hale said a full recovery in the lodging industry is dependent on a return of group demand, a process that could take several years.
Speaking Aug. 26 during an NYU Schack REIT Leadership Workshop webinar, Hale said the lodging industry is in a challenging period, “and there’s not a real catalyst to change the current view of the environment for the remainder of the year…We won’t see a full recovery until group demand recovers, and that’s going to be a multi-year process.”
Asked whether the pandemic has caused RLJ to consider rebalancing or modifying its portfolio, Hale replied, “there’s nothing in this backdrop that we’re experiencing that would suggest that we need to adjust our portfolio. In fact, the crisis has actually affirmed our investment strategy.” She noted that RLJ concentrates on premium-branded hotels that are limited and compact-service in nature, with a lean, more efficient, and less-complex operating model.
“All of these things have allowed us to be more resilient relative to traditional, full-service hotels,” Hale said. While about 80% of RLJ staff is focused on dealing with the crisis, about 20% of employees are focused on the future “and how we can take advantage of that,” she noted.
Hale also said RLJ is working well with its brand partners to navigate the crisis. “I really feel that the brands are in the foxhole with us.” She added that the brands are also taking the lead on helping to reimagine certain segments of the industry.
In terms of the broader discussion around racial equality, Hale highlighted the diversity that has always existed within RLJ. “I think RLJ can serve as a real example for the broader REIT industry.”
While meaningful progress has been made in the past 10 years in relation to improving gender diversity in the real estate industry, Hale pointed out that “there still needs to be a lot of work around minorities and people of color,” particularly within the leadership ranks.
In order to see effective change, business leaders need to be “committed and deliberate about adding diversity to their leadership team,” Hale said. While it’s important to add diversity to all levels of an organization, “it’s most impactful when you add it to the executive level because those individuals will play a key role in helping to drive it through the overall organization,” she added.
Hale also said the pandemic will challenge the notion of which asset classes should be in a public vehicle.
“I don’t think this pandemic has created a paradigm shift, I think it has accelerated certain trends” that will benefit some sectors and create headwinds for others, she noted.