I was in New York City (NYC) over the Veterans Day weekend for the HX: The Hotel Experience 2019, one of the most important trade shows in the lodging industry. Similar to last year's trade show, the HX 2019 also entailed four components, including HX: The Marketplace, HX: The Conference, Boutique Design New York, and the STR (Smith Travel Research) Student Market Study Competition.
While the U.S. continues to be in the midst of its longest uninterrupted economic expansion in modern history, slowing growth metrics along with abundant geopolitical uncertainties are heightening perceived risk of impending recession.
Think back to an important decision you have had to make. You may have weighed out the costs and benefits, studied the context, and evaluated the potential outcomes. While one hopes that careful analysis will lead to rational choices, the truth is that our human minds are complex. Our rational decisions are doctored by - amongst many others - feelings of potential regret, conscious or subconscious references, emotional attachment, and herd mentality. These biases prevail in business as much as they do in our personal lives, and we are all prone to them. We take a first look into the role of herd mentality in hotel investment decisions.
The objective of this article is to analyze the strategic approach that lodging corporations with owned properties in their portfolio are conducting, which advocates for a bifurcation between operational and asset management orchestration. Such approach is originated inside big hotel chains and is opposite to another industry widespread practice in which a third-party owns several hotel properties and rents those to hotel chains (i.e. Blackstone, Starwood Capital Group, Bain Capital, etc.).
Several reports show the astonishing growth in self workers, contract freelancers and consultants, according to Statista, 10.3% of the working age population is involved in entrepreneurial activities. Alongside this, project task forces are becoming more and more common, and companies are starting to become more agile in their operations, ING's agile transformation started with the 3,500 staff members at group headquarters, Bart Schlatmann: former chief operating officer of ING Netherlands said, "we invested in tearing down walls in buildings to create more open spaces and to allow more informal interaction between employees. We have a very small number of formal meetings; most are informal. The whole atmosphere of the organization is much more that of a tech campus than an old-style traditional bank where people were locked away behind closed doors."
Real estate and Instagram are a match made in marketing heaven. Pretty much everything about the social network is well suited for real estate marketing: its photo- and video-based content formats make it easy to showcase properties; its mobile-first nature easily incorporates location data and geo-targeting; its huge user base—now numbering more than 1 billion monthly active users—enables reach across many demographics and geographies; and its integration into parent company Facebook’s advertising platform provides sophisticated campaign targeting options.
According to an AMPM Hotel supply statistics (October 2018), approximately 150,000 new hotel rooms are expected to enter London by 2020. Research by Knight Frank indicates that investment in the UK hotel industry reached £7.4 billion, demonstrating a 29% year-on-year rise and a £1.7 billion increase in 2018 alone. This extraordinary growth was due to a 50% increase in international investment, with overseas buyers accounting for £4.9 billion invested into the UK hotel market with Asian investors such as mainland China, Singapore and Hong Kong being principally responsible.
With 121 consecutive months of growth through Q2 2019, the U.S. economy is now in record territory for the longest expansion period in history. The decade long economic expansion has been fueled in part by job growth, record low unemployment rates, and low-interest rates in the capital markets. During the first half of 2019, America has continued to add jobs, albeit at a slower pace compared to last year. U.S. consumer confidence remains vigorous and stock market indices continue to set record high levels. To mitigate the risks of slower global growth and trade-policy uncertainty, during the near term, the Federal Reserve is widely expected to reduce interest rates. While current economic indicators are a healthy backdrop for the lodging industry, the duration of this expansion has rendered many economic pundits now fearful of the U.S. entering a recessionary environment during the near term. With this said, most anticipate that when a recession does occur, it will be less severe than the Great Recession of 2009-2009.
A new hotel opening or changing of flags has so many moving parts. As an owner or manager overseeing this transition, you are likely wearing multiple hats. Here is a hotel digital marketing timeline for opening hotels to ensure you are building your website presence and a healthy channel mix that has reduced OTA dependency later down the road.
Hotel openings are an elaborate affair that seek focused inputs from the ownership at a pre-opening stage. While the hotel management company and operations team are largely responsible for the pre-opening preparation, the owner also has his/her tasks cut out. Here's a look at the very basic set of expectations from an owner of a managed-hotel at this stage:
In Part 1, I discussed the importance of determining the true revenue and expense levels of a property, which may not be overtly evident by statements or tax returns provided by a motel owner. When reconstructing a true (or as close to true as possible) statement, this may diminish the reliability of the direct capitalization method and discounted cash flow in the reconciliation if these opinions are based on estimated statements. Conversely, this heightens the importance of the RRM if the rooms revenue is the most documented line item, as well as the importance of the sales comparison approach; moreover, these two may be the most highly relied-upon methods by sellers and buyers in the motel investment space.
INTRODUCTION (I HEAR THE DRUMS ECHOING TONIGHT) - Ever since its release in '82, Africa by TOTO became a quadruple platinum record, with around 300M streams on Spotify, 400M YouTube views and even a solar-batteries-powered sound installation in the Namib Desert, "to keep TOTO going for all eternity". But what makes this song so special after all these years? I doubt it's simply because of the '80s wave of nostalgia we are experiencing and, even though TOTO was (and still is) a super-band of extremely skilled musicians, there must be a deeper reason. Most genetic experts today agree that the entire humankind originated in Africa, and that all non-African people descend from what anthropologists describe as the "Out of Africa Migration", happened some 70,000 years ago. It is undeniable, therefore, that this continent does strike a chord in us. The reason, quite simply, seems to rely on our DNA.
Asset managers are a conduit between a hotel’s owner and the company operating the hotel, writes HOSPA’s Jane Pendlebury, and as such they add great value to both parties. One key to their success is the ability to carefully manage both parties’ expectations.
Bigger is better, right? That's why there are more hotel mergers and acquisitions in recent years; there are also many hotel chains are building larger loyalty programs to pull in more travelers. Besides hotels, Airbnb and OTAs (online travel agents) also want to get bigger through acquisitions.
Thanks to the increasing complexities of today's hospitality market where disruptors seemingly turn up out of nowhere and operators consolidate at a fast rate - it is easy to understand why.
In the lead up to the 2019 Arabian Hotel Investment Conference (AHIC), we asked a number of industry partners how they synchronise for success.
Planning for a major property renovation can give any hotel management team a major headache. Still, keeping your hotel property fresh and inviting increases guest satisfaction, leading to more repeat customers, referrals and a major boost in revenue.
In 1919, two grand hotels were racing to completion. The Hotel Commodore connected to Grand Central Terminal and owned by The New York Central Railroad officially opened on January 28, 1919. Named after 'Commodore' Cornelius Vanderbilt, the founder of The New York Central Railroad System, it had a whopping 2,000 guestrooms. It also housed the single largest room ever constructed.
If you're thinking of investing in the hotel sector in Europe where should you be looking to put your money? Patrik Hug, Senior Consultant, Advisory & Valuation Services at Christie & Co based in Munich, Germany, says much depends on how risk averse the potential investor is.
Recently, my partner, Guy Maisnik, and I spoke about hotel retail mixed-use development with Kelsi Maree Borland of GlobeSt.com. Her article, Why Retail Owners Are Partnering With Hotels ran with the subtitle, With retail evolving to be more experience-driven, retail owners are finding the benefits of adding boutique hotels to shopping centers.