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The Lodging Conference 2018 – What We Learned

For the past 24 years, The Lodging Conference has brought together the hotel industry's most influential owners, operators, presidents, CEOs and dealmakers to strategize about development, finance, franchising, management, construction, design, and operations. Associate Principal David Plank attended this year’s conference in Phoenix and gathered key points and predictions for continuing to serve our hospitality clients well.

Here’s what we learned.

The pipeline remains strong.

The construction pipeline, consisting of projects under construction and in planning, continues to remain strong. While the upcoming rate of growth is predicted to be moderate, experts expect the pipeline to meet and exceed the pre-recession peak in 2019. Previous market cycles tell us the line will eventually level off (and at a point decrease), although current forecasts appear positive through the next two years. Lodging Econometrics, Inc.forecasts a 2.4% growth rate in new U.S. room openings from 2018 to 2019, and 2.6% into 2020.

Looking past 2020, we are pointing our clients to innovative sites and existing buildings, the types that are often overlooked. Combining our skill in the entitlement process, and our knowledge of pairing properties with the highest potential flags, we are delivering powerful results for our clients through the next 2 years and beyond.

Hot Segments: Upscale and Upper Midscale.

The Upscale and Upper Midscale segments continue to have the greatest number of projects in the national queue. This is consistent with what we are seeing in our projects locally, such as the SpringHill Suites and Hilton Garden Inn. However, we are also seeing an influx of Upper Upscale hotels, including projects for Renaissance Mayfair, Hotel Retlaw, and the Milwaukee Athletic Club. We expect this growth to continue in areas currently underserved by Luxury and Upper Upscale flags.

Design Matters.

Whether it’s a memorable check-in experience, a luxurious guestroom, or a “wow” moment in a public space, design matters in ways big and small. The bottom line is, as we continue through the age of social media, consumers are not only looking for memorable personal experiences; they are seeking out (and paying for) experiences they will be excited to share. Smart operators know this and are seeing social platform geo-tags prove the marketing impact of thoughtful design.

Connectivity: Meet the new guestroom.

What do you want to be able to control from your smartphone? These days, the question is more accurately phrased ‘what don’t you want to control from your smartphone’?

Today’s guests are expecting equal connectivity to what they have in their homes, and hotel owners are actively working to understand how new tech can positively affect ROI. App-based check-in/out, HVAC control, lighting and room service are all now a reality. Looking ahead, it is critical for hospitality clients to hire designers proficient in tech to help them evaluate opportunities the right way.

Authenticity. Be true to what (and where) you are.

It comes as no surprise that everything that works in NYC doesn’t necessarily work in parts of the Midwest, and vice versa. That said, a recap is always worthwhile. This year we were treated to an amusing reminder when two panelists realized (in front of a rather large audience) how different approaches in Manhattan and Ames, Iowa really are.

As experts who work across the country, we know the importance of brand authenticity. Equally important, however, is that geographic authenticity rings true. While branding does this through standards, if you are considering a new geographic market we suggest you take the time to understand how locals will engage – or if they even will at all. In our experience the answer will be a revealing one and is as important as how out-of-town visitors will perceive and use the hotel.

For more insights on The Lodging Conference and our hospitality expertise, contact David Plank at dplank@kahlerslater.com.