Boutique Design New York (BDNY) 2022
Our team made its annual trip to New York this week for the BDNY hospitality show. Following two years of pandemic-induced doldrums, we witnessed a huge return of people bringing great enthusiasm and new projects to the hospitality sector, all boding well for a strong 2023-2024. Attendance was reportedly up 20% above 2019 pre-COVID levels, and the halls were full of new names entering the space.
We also noticed the continued expansion and visibility of retail brands offering B2B services to this sector (CB/WSM/R&B/Arhaus). Even Wayfair was exhibiting, which presents the interesting concept of “how will e-commerce impact the hospitality industry going forward?”
Most disappointing was the management of the crowds and check-in process at the Javits Center. We waited in line for over 40 minutes for our badges, which seemed to persist throughout the first day. This was unnecessary due to everyone already being pre-registered, with digital QR codes pre-loaded on mobile devices. Even some exhibitors and owners got stuck in line, missing precious minutes in the booth to meet with clients and potential customers. This was a major miss that should be rectified going forward.
Key show themes included:
Most everyone we talked to was enjoying strong bookings that started picking up steam earlier this year and which should produce strong revenues in 2023 and beyond.
Would a recession in the US economy dampen this upbeat outlook? Most believe the hospitality sector will be strong despite the general macro-economic woes, as hotels have significant pent-up need to refurbish and so many new construction projects already slated for completion over the next 2 years. Those projects shouldn’t stop due to a short recession (read Tim's article Putting the Recession in Perspective for more).
Several clients told us that Vegas alone could drive the industry upward for several years just because of their stated expansion and refurbishment plans.
Domestic vs Imports?
With freight rates back to pre-COVID levels, many purchasers are now rethinking how to acquire their furniture. Domestic manufacturing has the edge today, but many are struggling to build capacity. Mexico is an option for some, but with limited scale for many. This debate is far from over.
Outdoor/Casual is still hot
There were more outdoor exhibitors this year as a result of COVID, and people wanting to spent time outdoors (we think there has been a permanent shift in how the end consumer thinks about indoor/outdoor living). Hotels recognize this and are expanding their casual/outdoor living assortment. Our M&A business is active in exploiting this trend (see Sunset West’s acquisition by Hooker Furnishings).
Mergers & Acquisitions
Despite the higher interest rates and choppy economy, mergers and acquisitions remain a top-of-mind topic for business owners. We believe 2023 will be a strong year for deals as P&Ls improve and stability is proven in the hospitality ranks. Plenty of PE money is exploring the broader furnishings sectors and we love seeing fresh capital entering our industry.
Happy holidays to all. Let’s get ready for a fantastic 2023.