I recently attended The Americas Lodging Investment Summit (ALIS) in Los Angeles and if the sentiment running through the meeting rooms, corridors, and ballrooms of the conference was any indication, the development outlook for the remainder of 2024 most certainly evoked positivity and excitement for what is ahead.
Although uncertainties surrounding interest rate cuts (could six cuts be possible in 2024?) and election year anxiety are areas of concern, major brands such as Marriott, IHG, Accor, and Hyatt reported significant growth in both the luxury and lifestyle segments. Adding that to the buzz of Sam Nazarian and sbe announcing a comeback partnership with Wyndham Hotels & Resorts with their new lifestyle brand targeted to millennials and Gen Zers, ALIS 2024 created an energetic platform for even more deals to be made.
NEW VERTICALS FUELING DEVELOPMENT:
Hotels are in a particularly good spot as most of the major lenders are reported to be actively pursuing new opportunities, many of which are focusing on new verticals that take advantage of the customer’s desire to spend their income on experiences instead of products. This welcome shift in consumer priorities is allowing brands to create a cohesive ecosystem that keeps loyal guests within the brand family as their tastes and interests shift.
Most industry-leading panelists– particularly those who spoke to how design influences their development decisions and spending – also looked to business and “bleisure” travel as a key element to their portfolios. Improvements in the extended stay category with an eye toward how to make these travelers more comfortable while working wherever they wish, have become paramount for all major brands including Marriott International, who spoke to their Innovation Lab where live/work prototype rooms are welcoming actual guests who provide insightful feedback that influences design decisions. Improvements in the extended stay category with an eye toward how to make these travelers more comfortable, while working wherever they wish, have become paramount for all major brands including Marriott International, who spoke to their Innovation Lab where live/work prototype rooms are welcoming actual guests who provide insightful feedback that influences design decisions.
LUXURY EXPERIENCES HIT NEW HEIGHTS:
One of the more interesting panel discussions focused on luxury and experiential design-forward concepts and brand extensions that ranged from luxury yachts to treehouses to the groundbreaking Aman brand and their entry into large cities. Once again “experiences” was the word of the day (and conference) and The Canyon Group Founder & Executive Director Homi Vazifdar had the audience captivated with his story of how via “dumb luck” the Amangiri property was able to drive not only the concept of luxury tented villas, but how their demand drove the overall Aman ADR to be the highest in the world during Covid – a development that remains true today for the company. Look for this trend to continue as luxury guests continue to seek out “locality” as the main driver in their travel decisions.
Hilton Senior Vice President – Global Head Architecture + Design Larry Traxler blew everyone’s mind however by outlining his recent work with NASA on their space tourism project that is targeting 2030 for zero-gravity stays. With more travelers in search of these types of bespoke experiences, expect brands to continue to push the envelope in their offerings that take the entire industry to new heights.
CULINARY INNOVATIONS & CHEF PARTNERSHIPS:
The overall feeling on food and beverage was strong, with CBRE executives highlighting the area as not only extremely important to their business, but also as a significant growth opportunity and driver of decisions for hotel investors and developers. Although increased labor costs due to a continuing lack of a solid candidate pool are still an issue, hoteliers are continuing to push innovative and experiential programming to drive the bottom line.
Vice President & Head of Hotel Development at Starwood Capital Jason Cruse sighted a new partnership with famed L.A. Chef Nancy Silverton as one example of culinary innovations designed to drive bookings and revenue. In addition to traditional restaurants, SH Hotels will also feature the Chef as she leads “culinary retreats” tailored to small groups of food enthusiasts, thus delivering a truly engaging experience. These unique experiences will operate primarily in the slowest weeks of the year and will drive a premium rate while checking boxes from both a business angle and a customer loyalty standpoint.
ALIS DESIGN+ – DESIGN DRIVERS & CAPEX SPENDING:
Kicking off the second phase of the conference, ALIS Design+ event programmers immediately made their impact felt via Marriott International President & CEO Anthony Capuano’s discussion on the benefits of architecture and design. If “experiences” was the ubiquitous buzzword takeaway from ALIS, “sustainability” could not be ignored during ALIS Design+ and Mr. Capuano drove home that point when asked for his advice on where he would spend CAPEX dollars.
After first mentioning investments in technology infrastructure focused on ease-of-use for business and transient workers, he discussed how today’s customer is not only interested in sustainability but are increasingly asking for this data when making their booking decisions. He went on to encourage all developers to source materials that are both local and timeless and with a longer “shelf life.” He also acknowledged that this is not the easiest proposition given that everyone is operating in a world where design moves fast, but the current level of knowledge and creativity of architects and designers will continue to drive and create truly sustainable solutions.
While lofty expectations and positive vibes ruled at ALIS 2024, the reality of having to execute on your hotel development projects – particularly when it comes to creative and impactful solutions for your food and beverage, branding, and interior architecture needs – requires strategic planning and implementation.
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