Finance & DevelopmentFive Things Hoteliers Need to Know to Invest in the Right Asset

Five Things Hoteliers Need to Know to Invest in the Right Asset

Raines Company’s Vice President, Investments, Kristen Myers, observes that many investors sitting on the sidelines expecting distressed property bargains as a result of the pandemic have been disappointed. While they need to find “homes” for their money, she says, they still need to be smart about where to put it. She therefore shared with LODGING some of her insights and advice for hotel investors eying opportunities as 2022 progresses.

Don’t rush into anything.

Do your due diligence. Whether you’re looking to acquire a piece of property or a newly built hotel, Myers says, do your own research, rather than depend on advice from a prospecting contact. “We encourage everyone to work with the right partner and operator, someone you trust who has successfully navigated challenging times in the industry before,” she maintains.

Focus on timeless—not trendy—real estate with established demand generators.

Myers observes that many investors—mainly those new to the industry—are focusing on new urban markets where a particular concept is happening; but she warns that it’s difficult to predict what the demand generators will be in the coming years. “We suggest going for properties that are timeless in established markets. For example, rather than chase after properties in Asheville, N.C., like everyone else, we just closed on what we regard as a timeless property with beautiful views and a great reputation that is located in a small town 35 minutes west of Asheville.”

Choose an operator that can offer efficiencies to improve ROI.

Operators with a strong record in or near the property you’re considering can drive efficiencies, notes Myers. “By working with a company that can share the cost of staff—such as a chief engineer or sales executive—you can save on skyrocketing labor costs. You can also slash vendor costs by working with a company that has a programmatic schedule with vendors,” she adds.

Generate demand and revenue by vamping up amenities.

Something else to consider, says Myers, is finding ways to add amenities that appeal to the lifestyle-oriented leisure travelers who continue to drive demand. A bar or restaurant that attracts locals as well as guests can be a differentiator and source of additional revenue.

Have an established exit strategy.

Myers says her company starts with a goal for each property and seeks partners with that vision, but recognizes that the situation can change, as the pandemic illustrated. “While it’s important to have a clear strategy—we typically present clients with a programmatic schedule—ever-changing market conditions demand flexibility. That’s why we communicate with clients and re-evaluate year over year depending on the needs of the market.”

RELATED ARTICLES

Dreamscape Hospitality Assumes Management of Three Hotels in Houston

HOUSTON, Texas—Dreamscape Hospitality announced that it has assumed management of three hotels in Houston, Texas. "We are excited to deepen our presence in Texas through...

Hilton Announces Plans to Debut Spark by Hilton in Puerto Rico

PONCE, Puerto Rico, and MIAMI, Florida—Hilton announced the signing of Spark by Hilton Ponce, marking the upcoming debut of the brand in the Caribbean...

Wyndham Announces Partnership With Cygnett

DELHI—Wyndham Hotels & Resorts announced a new strategic alliance with Cygnett Hotels & Resorts that will not only introduce its La Quinta by Wyndham...

New Pyramid Global Hospitality COO Continues Focus on Big Data to Benefit Owners

Pyramid Global Hospitality Chief Operating Officer Eric Habermann retired in April following seven years with the company and a nearly 40-year career in hospitality....

Grand Hyatt Kauai Resort & Spa Launches Scholarship Program

Grand Hyatt Kauai Resort & Spa, a 605-room resort, announced the launch of a scholarship program to support the continued education of its colleagues...

Hilton Surpasses 500 Hotels in Florida

MCLEAN, Virginia, and MIAMI, Florida—Hilton announced a major milestone as the company surpassed 500 open hotels across Florida. This growth was fueled in part...