If you are a hotel developer, whatever plans you had for 2008 may have to change. It has been a sellers market for the past few years and access to financing has been easy and cheap Bringing a property to market or entering into an acquisition in the coming year will test the abilities of your marketing and abilities.

Here are some major considerations that call for new strategies:

* Scrutinize financing. It's become a turbulent and uncertain capital market. Sellers in 2008 will need to know a lot more about the capitalization plans of prospective buyers. You will need to direct your advisors to dig deeper into the details of buyers' financing plans. Any offers that are presented should be accompanied by a detailed explanation of a prospective buyer's financing plans. Active buyers in recent years had no difficulty lining up adequate capital to close deals, and debt was usually the least of the challenges in completing transactions. . Not so going forward. Financing in '08 will be the key element to most deals.

* Study the supply side. There is an unprecedented amount of new hotel supply in the development pipeline in many regions of the country. Your brokerage team needs to have extensive local market knowledge of which planned and proposed hotels are actually going to get built, their respective sponsorship and viability. An accurate and timely portrayal of the future supply side of any market will aid in presenting existing product to a skeptical buying market. If you are buying or selling in a market area where there will soon be a significant additional new inventory of rooms, you're going to have to be more thoughtful and realistic in pricing. We know, for example, that some planned or proposed properties in San Francisco, Phoenix, Seattle or the Greater Los Angeles area are unlikely to be built because of unique approval issues or other complications. On the other hand, some planned projects will impose a major impact on the downstream revenues of properties up for sale.

* Evaluate regions. As a prospective purchaser, you must become more geographic in your analysis. 1) Supply Growth vs. Demand Growth, and 2) RevPar Growth vs. CPI. In 2007, with respect to Supply and Demand Growth, we "green-lighted" as strong and healthy 22 out of 50 U.S. hotel markets last year. But projections for 2008 shows that only 13 markets offer the same promising prospects. So, you must develop a pricing and offering strategy that recognizes the fundamentals in your specific market. It's important to know that nothing remains constant, and you must have current market research and strong local knowledge to avoid making bad decisions.

* Know sellers' motives. You should also not get too hung up on this year's macroeconomics. Seller's motivations vary greatly. People often sell hotels for reasons other than strictly economic considerations. They may have current liquidity requirements for other projects, partnership issues, estate settlement concerns, or even retirement. These considerations must be factored into your marketing and acquisition strategies.

* Consider refinancing. Selling a property may often not be necessary to achieve your end-game goals. Refinancing may be an option. Mortgage debt continues to be relatively inexpensive and available, even with the more stringent underwriting requirements resulting from the current turbulence in the debt market. There are viable options of recapitalization other than selling which may satisfy near or long-term objectives. A proper understanding of an owner's business plan is critical and may indicate other reasons not to sell.

* Know it's a sellers' market. Bottom line...it's still a good time to sell hotels, in spite of the considerations cited above. There are a variety of reasons for this. There is still plenty of capital available to fund purchases. There are many exciting new hotel brands emerging that can be used to convert existing properties and reposition them in ways that add real value. It may not be as good a time to sell as we've experienced over the past two years, but, during this past decade, the institutional world has come to truly accept hotels as viable portfolio investments.

* Be optimistic. In some situations, it will be easier to sell hotels at a premium in '08 than in the previous high volume-transaction years. For instance, almost half of the major hotels in San Francisco have changed hands in the last couple of years. That means if you want to purchase a property there, you're going to have to line up at the door of the one or two remaining hotels left to buy. Sellers of these hotels are in the cat-bird seat.

* Use marketing fundamentals. Brokerage marketing strategies must go "back to the future," because over-reliance on online marketing tactics has failed to produce anticipated results. This is due to spam, excessive emails and the impersonality of electronic marketing. You will get better transactional performance with printed and mailed materials that contain rich photography and vivid descriptions, charts and analysis of properties for sale. People appreciate higher-touch traditional customer service and live communication in conjunction with electronic information distribution and due diligence rooms. We think a combination of traditional and online marketing services is essential.