- Expansion of hotel-branded mixed-use residential
projects – Luxury branded condo-and-hotel projects
have become a major trend in popular real estate markets such as
Miami and New York in recent years. We now see the trend expanding
beyond the luxury sector to include different asset classes and
other cities nationwide as developers look to seize on the
popularity of both hospitality and non-hospitality-based brands to
sell condos and help offset the costs of hotel and related
construction.
- Tapping into consumer demand for experiences
– Today's consumers generally are choosing to
stay at a hotel or destination that caters to a specific interest
or local experience, such as a food and wine festival, wellness
retreat, live concert, or sporting event. For example, a hotel in a
city that's hosting a Taylor Swift concert could do well by
providing transportation to the event or creating a dedicated area
where guests can access concert-related information.
- More transactions expected as lending environment
stabilizes – While a predicted increase in
transactions in 2024 is not setting the bar very high, many hotel
owners likely will look to refinance debt as loans come due and a
more stabilized interest rate environment brings clarity to
borrowing costs and asset valuations. Higher interest rates and
tighter lending standards could remain for the foreseeable future,
however, suppressing the pace of new construction and potentially
boosting hotel pricing growth. The smart money seems to be on
borrowing early in the year (like now) while lender allocations are
more accessible.
- Continued recovery in corporate and group travel
– After a sluggish recovery from the pandemic in
2021 and 2022, convention hotels in popular U.S. travel
destinations such as Las Vegas, Nashville, and Washington, D.C.
have seen stronger occupancy and revenue in 2023 and likely will
continue to grow in 2024. Business-centric urban markets, including
Chicago, Miami, and Seattle, as well as smaller markets, including
Indianapolis, Kansas City, and Detroit, also have continued upside
potential.
- Flexible Spaces and Remote Work Support – With the rise of remote work, some hotels are adapting their properties to attract people looking for a "workation." This includes providing comfortable co-working spaces, high-speed internet, and other amenities and public spaces designed for guests who need to work remotely.
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