Hospitality Outlook: Opportunities Ahead

Demand for unique travel experiences reigns. The reasons vary from pent up demand post-Covid, an aging baby boomer population, an increase in a workforce that can work from anywhere, and an innate desire for people to share their stories on social media. Travelers want unique experiences that reflect the destination, and many are willing to pay a premium for an experience that embraces the local culture. Extended stay and elevated brands offer the most market growth potential as they cater to the discerning traveler’s needs.

Thoughtful, impactful design is critical to meeting this demand and has the potential to draw visitors and locals, alike. Over the last 10 years, we’ve seen a market shift of hotels blending more with the local community, creating a unique hospitality destination for individuals outside of the hotel guest. By thinking about not only the clients proforma, but also their end user experience, these destinations are designed to support a revenue stream that is not solely dependent on the guests of the hotel.

Using creative but focused design elements that integrate the local culture, hospitality destinations will become increasingly tailored towards show and tell experiences. Inspiration will continue to come from travel and exploration, blending details like textiles, local food, culture and experience. Emerging boutique is blossoming into a source of influence in hospitality, as many small brands look to craft unique experiences for their consumers.

Financing remains challenging. Without a doubt, the hospitality industry has had a significant swing due to the pandemic. Operators and owners had a major hit to their bottom lines in 2020-2021. Today, despite rates and occupancy continuing to climb, rising costs, and inflation paired with a very tight labor market impact many organizations’ ability to secure financing for new developments.

The design industry’s role in this remains fluid. Our experience has shown us that engaging a design team early can result in preliminary concepts which demonstrate the future vision of a property and capture initial ideas for integrating local culture, and ultimately inspire investors.

Technology is being leveraged to fill gaps. More than ever, technology is being developed to help stabilize the market. From using increased booking platforms reducing the risk of cancellations, to advanced AI robotic systems to help alleviate the need for additional staff, to banking services allowing for cash advances on earned wages for hotel staff, it is clear that technology is being leveraged in new ways. The impact of this can help attract and retain hourly staff, reduce costs and long-term operations, and positively contribute to the guest experience.

As designers, we have seen firsthand the importance of spaces being designed to be adaptable and flexible to changes in technology. Back-of-house and front-of-house planning should embrace new and emerging technology trends, while recognizing what rules the industry today may be antiquated in the future.

Down to the details with genuine sustainability. Sustainability is not a destination. It’s a spectrum and a journey. Leaders in this space are dealing with the many different tradeoffs and layers to what is considered sustainable. When connecting the dots between sustainability and hospitality, experts are looking at more than just if a building is consuming less energy. They are getting down to the details – both operationally and strategically. As consumers become savvier around seeking a green experience, the most effective way towards sustainability is packaging it with a great experience.

Making selective design decisions towards the end sustainable goal includes getting the whole team involved. This could include:

• Using multi-serve plastics and shampoo containers rather than 3oz throw aways.
• Limit distance of transportation in goods by partnering with local community partners.
• Seek out social-focused enterprise workforces who share a similar community impact strategy.

As we continue to advocate for our planet, designing for the sustainable experience will support an organization’s strategic objective and reduce operational costs.

Data’s never been better. The hospitality industry understands that smart decisions are made with the data behind it. With no data, one can not see their past or their future.

Lisa Bonifacio, president and general counsel of Bunkhouse, said “collecting data on guest preferences is key to providing a more high-touch, personalized experience.” By understanding what other brands are offering and highlighting the proforma, data will drive the design. (Samantha Shankman, 2023 Skift "Independent Hoteliers Seek Every Edge Against Big Brands")

The design process is infused with measuring the data to make better long-term decisions. Whether it is analyzing a corporate office building for its cost-saving potential on becoming a hotel, or being an advisor to vetting the mixed-use opportunity, we help our clients understand the value of these metrics and the long-term impact.

At Kahler Slater, we consistently challenge ourselves to understand how we can respond to the demand of the market and achieve the goals of our clients; ultimately, enhancing the hospitality experience of each guest and of the greater community. What we heard at The Americas Lodging Investment and the Independent Lodging Congress was similar to what we are already experiencing. We continue to hear how the industry is shifting to meet these changing conditions and spark the dialog for how design can solve your challenge.