The More The Hotel Market Changes, The More It Stays The Same
Many feared Airbnb and short-term multifamily rentals would challenge hotels the way Uber has slammed the taxicab industry.
But economy, luxury and boutique hotel operators say their footprints remain solid, particularly in a world where travelers — despite having tech tools at their fingertips — still desire human connection and personalized services as much as they did 20 years ago.
“Customers want something unique and special. Everybody wants something more,” Omni Hotels & Resorts President Peter Strebel said while speaking at Bisnow's Dallas-Fort Worth Hospitality Boom conference in Arlington, Texas.
“One of our [mission] statements is no two hotels are alike. I think that clearly defines us and makes our properties more of a destination to go to.”
Strebel's Omni flag is slated to brand a luxury hotel and resort in Frisco near the future PGA headquarters and golf course.
In an app-obsessed world, he said customers still want access to quality staff, facilities and amenities along with technology. They also have an eye for design and a hotel's sense of place in the community.
“We want them to feel the city [they are visiting] in the hotel, so we really spend a lot of time on design,” Strebel said. “A good 25% of my time is spent working with design teams internally and externally to really make the hotel special and each hotel has a story and that’s what really sets us apart. We are storytellers in our buildings.”
Dream Hotel Group Chief Development Officer David Kuperberg said smaller brands offering personalization and unique concepts also remain in vogue.
“There are developers out there that don’t want to be with the Marriotts or the Hiltons of the world, and they seek that independent, authentic feel that Dream Hotel and Omni bring, so we have never been busier," Kuperberg said.
Even with guests more focused on apps and technology, hotel guest expectations for design, service and development haven't changed in many ways.
That's why Wyndham Hotel Group and its 20 brands aim for consistent relevance over time rather than succumbing to fickle trends.
"For the most part, we want to do this forever and as people’s tastes and choices kind of ebb and flow, we are probably going to stay somewhere in the middle where we can fabricate an experience that crosses lots of generations and lots of different markets," Wyndham Hotel Group Vice President of Franchise Sales, Lifestyle Brands Glenn Moon said.
G6 Hospitality, the parent company of Studio 6 and Motel 6, sees the economy class segment shifting somewhat, but still succeeding on tried-and-true principles.
“Our new prototypes do have expanded lobbies and some unique areas in the hotels, [including] pools and exercise facilities in some locations," G6 Hospitality Vice President of Franchise Development U.S. Jeff Stephenson said.
"The customers, no matter if it's 57 years ago or tomorrow, still want the same thing: They want a great room and great service at a great value."
When it comes to investing in hotels this late in the real estate cycle, investors are leaning into markets with higher barriers to entry since they offer safer returns.
"We as an investor are focusing on [high] barrier to entry locations where it's hard to get [in], which [for us] is the Downtown convention center [area]," Hoque Global CEO Mike Hoque said.
RREAF CEO Kip Sowden said his group chose the Southlake submarket for construction of a Delta By Marriott Hotel because of how difficult the submarket can be when it comes to entitlements and entry.
Markets that have the most barriers to entry for hotels will be the ones that survive the best in any economy, particularly if demand outstrips supply and it is difficult for other concepts to enter, Sowden said.
