AR Hospitality Consulting’s Post

Like many of my industry colleagues, I am heading up to Manchester for the Annual Hospitality Conference (AHC) this afternoon, and had a moment to read this timely appraisal of luxury hotel development in the Capital in the The Guardian. Good to see a couple of our projects referenced. As a broad overview it is on point, and makes a clear link between historic drivers for development and what has given these kinds of properties such long appeal, both as destinations and as investments. You might, however, add the following: investment is cyclical, and the current cycle (looking forward to openings in 2-5 years) is interesting both for the types and location of sources of investment and just how diverse (in our experience) they are. It is right on another point. Luxury is no longer enough as an end in itself; it has to be, as the article suggests, transformative. This is taking different forms - deeper links to the city or rural context, sustainability receiving the serious engagement it has mostly lacked in the sector until now and lastly an understanding of how social value (in its many forms) has an increasing role to play in what this transformation actually means:

Bisnow's New York Hotel & Hospitality Conference shed light on the resurgence of hotels and future development trends. Hotels are showing inflation resiliency thanks to daily inventory turnover and growing ADR. Capital has become more expensive, but liquidity is available from private equity firms and alternative sources. Next to class A, hotels are increasingly viewed as more desirable than office buildings. Leisure travel is back, exceeding pre-pandemic levels, while business travel has shifted towards retreat-style gatherings. Overall occupancy is still slightly below 2019 levels; however rate has significantly exceeded peak levels. The next 5-7 years look promising for current hotel owners due to constrained supply and robust demand. New York hotel developers face significant challenges in development financing and regulatory permitting affecting new projects. Hotels that focus on bespoke experiences and storytelling are attracting discerning clientele. Brands are playing a critical role in driving visibility and loyalty, with a shift towards less intensive luxury services like QR codes, touchless check-in, and human touch complimented by AI. The market is adapting with new financial strategies and increased interest from institutional investors.

Some of the world's leading hotel developers and operators are being encouraged to invest in Swansea in a further boost for the city's ongoing transformation. Swansea Council is now marketing the opportunity for a hotel operator to build and run a new hotel on land between Swansea Arena and the LC leisure centre. This follows-on from an expert study commissioned by the council's tourism team that identified the need for three new hotels in Swansea. The study also recommended the site adjacent to the arena as favourable for a development of this kind. The hotel there would include a minimum of 120 bedrooms. If the hotel plan goes ahead, it would be largely funded by the private sector. Subject to the business plans of bidders, there could also be funding support through grants and loans from the Welsh Government and Swansea Council. Between 2019 and 2022, Swansea was in the UK's top five places for revenue per available room. Used by the hospitality industry to measure a hotel's performance, that figure is calculated by multiplying a hotel's average daily room rate by its occupancy rate. In 2023, Swansea also entered the top 10 of a UK hotel market index run by hotel consultants Colliers. The annual index assessed 38 UK cities against ten areas, including room occupancy rates, daily room costs, revenue per available room growth, development expenses, land values and market demand. ➡️ https://lnkd.in/egFF_yuG

EUROPEAN HOTEL DEAL VOLUMES SURGE TO FIVE YEAR HIGH Institutional capital was a major driver of investment growth, with Cushman & Wakefield & Wakefield reporting that European hotel transactions nearly doubled in Q2 2024 compared to the same period last year. Key highlights include: **H1 2024 volumes**: Over €11.6 billion, the highest since 2019. **2024 forecast**: Expected to exceed €20 billion, driven by rising debt liquidity and strong hotel performance. https://lnkd.in/dibhCTFP RCP Finance team has actively participated in numerous hotel financing deals and brand placements across multiple jurisdictions over the past 18 months, with several more closings expected in the coming months. We remain highly confident in the sector's outlook and anticipate continued growth, fueled by increasing capital inflows into this asset class. THE PAST 12 MONTHS KEY HIGHLIGHTS: Hotel Placement: - 2x Nobu Hospitality (signed) + 1 at LOI stage - 1x Equinox hotel (signed) - 1x Six Senses Hotels Resorts Spas at LOI Stage Hotel Financed: - 1x Marriott International - 1x The Standard Hotel - 1x Preferred Hotels & Resorts - 3x Hilton Hotels & Resorts - 1x Travelodge Hotels Limited - 1x Luxury Hotel Spa in Switzerland

Looking to enhance your hospitality offerings? This month's article on property improvement plans explores innovative strategies to elevate guest experiences and maximize ROI. From modernizing amenities to implementing sustainable practices, these insights can help transform your property into a sought-after destination. Be sure to check it the linked article! https://lnkd.in/geBxDKd3

What are the biggest problems hotel developers face when starting a new hotel project? Hotel developers and managers encounter various challenges when starting a new hotel project. Some of the biggest problems they face include: Market Research and Feasibility Studies: Conducting thorough market research and feasibility studies to assess the demand for a new hotel in a particular location can be challenging. Developers need to analyze market trends, competition, and economic indicators to determine the viability of the project. A SWOT analysis can be a very helpful tool. #hoteldevelopment #hoteldesign #hoteldesignstrategy Read more:

"Hotels in WA Sold for $10M by Marcus & Millichap" Read the full article below..

Challenges in the hotel development landscape

The Middlesbrough Development Corporation (MDC), established by the Tees Valley Combined Authority to manage and accelerate regeneration in Middlesbrough, is set to decide on a preferred hotel operator and construction contractor soon. The article suggests that Fairfield by Marriott will be the brand to open the new 200-bedroom hotel in Middlesbrough, Teesside. Some of the key considerations for selecting the right operator might include: 1) The local economic impact: Marriott’s presence could attract more visitors and boost local businesses, potentially leading to economic growth. 2) Community alignment: Ensuring that the hotel’s design and operations align with the local culture and community needs is crucial. 3) Sustainability: Marriott’s commitment to sustainability and community engagement could be beneficial if they implement these practices in the new development. There are a variety of other brands that I am sure would have been included in the selection process; Holiday Inn Express, Hampton Inn by Hilton and ibis, ibis Styles, ibis budget to name a few. In these scenarios, owners typically engage with us to leverage our expertise in the hospitality industry; ensuring a strategic and transparent selection of a hotel operator. The partnership would help secure favorable commercial terms, mitigate risks, and align the project with local development goals - ultimately enhancing the project’s success and supporting economic growth in the area. If you find yourself in a similar scenario, we're here to help! Horwath HTL UK | Crowe UK