While caution was in the air in New York City as developers and operators considered the near-term business environment during last week’s 41st International Hospitality Industry Investment Conference, during one-on-one meetings with HOTELS executives remained bullish about their prospects.
Here is a bullet-point summary of what brand leaders and developers told HOTELS about their strategies and plans moving forward (watch for more reports later this week):
Davidson Hotels & Resorts: Chairman and CEO John Belden, President Thom Geshay
- The lifestyle and luxury division of Davidson, Pivot Hotels & Resorts, has grown to 18 open or under development since its 2016 launch and now accounts for 25% of revenue.
- A growing resort portfolio might get its own division like Pivot and will also reach 25% of revenue by year-end.
- F&B accounts for 25% of revenue, driven by the resort and lifestyle portfolios.
- Davidson has had much success managing the Margaritaville resort in Hollywood, Florida, and is working on six other Margaritaville projects in various stages of development or conversion.
- Davidson had 35 hotels at the start of the year and will reach 47 by the end of 2019; eight are in the pipeline and are 18 to 20 months out.
- The group will be at US$1.1 billion in revenue by year-end; the five-year goal is US$2 billion, with resorts expected to drive growth.
Extended Stay America: Chief Development Officer Jim Alderman
- Two properties are topping off now.
- ESA has removed approximately US$20,000/key out of the original prototype. All-in costs without land should be US$65,000 to US$75,000 per key for the new prototype. Seven are under construction; one is a franchise.
- ESA expects to add 50 to 80 new prototype units on its own over the next five years.
- It is selling 75 properties this year, which takes the company halfway to 150 dispositions announced. More deals could continue thereafter.
- Franchise growth is expected to be between 15 and 20 this year, and momentum is building. Seventy-one are open with 40 more committed.
Hard Rock International: Head of Global Hotel Business Development Todd Hricko
- Hard Rock opened 11 hotel deals last year, adding 3,500 rooms.
- Gaming is flourishing, with Fort Lauderdale room count growing from 450 to 1,300, and Tampa jumping from 200 to 700 rooms.
- The company has added 900 rooms in London (the old Cumberland) as a franchise.
- In the past five years, 34 deals have been executed and in some phase of development with 70% to be managed.
- On an annual basis, it will average 10 to 15 deals a year going forward.
- Running RevPAR index globally is 109%, highlighted by Orlando, Florida, at Universal Studios, and Ibiza.
- Gensler and Hard Rock have been redesigning the company’s Reverb select-service brand over the past two years with Atlanta and Sonoma, California, signed. Atlanta is under construction and both locations are projected to open in late 2020.
- Reverb will resume development activity in the U.S. and Canada this fall after the redesign is complete, at around US$150,000/key.
Hilton Hotels & Resorts: Brand Head Vera Manoukian
- The focus is on elevating meetings and events, which accounts for 30% of the brand’s business, and is aimed at developing more creative concepts that support collaboration, include easy-to-use technology and provide breakout spaces. Tests have shown these spaces generate nearly 15% more revenue per occupied bookable meeting room.
- The brand’s pipeline stands at 600, with 170 signed. Ninety are in Asia Pacific; 40 in the Americas; and the rest in EMEA. Hilton wants to grow in successful urban locations.
Loews Hotels & Co.: Executive Vice President Alex Tisch
- Universal’s Endless Summer Resort in Orlando, Florida, managed by Loews, is adding 750 keys this summer.
- Another 300 keys are coming in August to Live! by Loews in Arlington, Texas; 212 rooms will be added to the Loews-run property in St. Louis, Missouri; and the Loews convention center hotel in Kansas City, Missouri, opens in April 2020.
- Tisch said one or two big deals are coming by fall and several more are due next year.
Margaritaville: CEO John Cohlan
- As part of a deal to partner with Karisma Hotels & Resorts in Latin America, the first four Margaritaville all-inclusive properties are signed and confirmed – two in Mexico (Riviera Maya and Riviera Cancun), one in Jamaica and one in Cap Cana in the Dominican Republic.
- The first opening with Karisma will be this winter; one or two more in 2020.
- The deal will lead to more new construction and some conversions. All will be luxury all-inclusive.
- Cohlan said the Margaritaville brand in the region will be at least as big as Sandals.
- The brand, with18 locations and 24 projects in the pipeline with nearly half under construction, is getting a US$300-plus rate in Hollywood, Florida, and Gatlinburg, Tennessee. “People are prepared to pay for an experience,” Cohlan said.