Location: Five Crucial Points to Address When Selecting a Hotel Location

By Fred B. Roedel, III Partner & Managing Member, Roedel Companies, LLC | February 19, 2012

This is a fun topic at a time when few if any parties have actually been seeking new locations. But as the economy improves and the hospitality industry begins to see some light at the end of the tunnel, it is nice to think investors and operators are actually talking acquisition and growth again. There is the old saying that the key to successful real estate investing is ‘location, location, location.’ This statement has stood the test of time, but the areas we investigate within a location are what really make a difference in our investments and their ultimate success. The five areas our firm focuses on when reviewing new locations are; the basic market, the physical site, the competitive set, demand and brand availability.

Marketplace

One of the first areas to evaluate is the make-up of the current market. We look at all kinds of markets within our strategic targeted growth areas and ask the following basic questions:

  • Is there an opportunity due to lack of supply?
  • Is the current supply of hotels newer construction or older, and if older, how old are they?
  • What is the makeup of the existing hotels, is there a potential opportunity with a brand or a particular segment within a brand?
  • Is the market a mature marketplace with a track record of success, a developing market or a new and developing market?
  • What do we think the barriers to entry for future development are?:
    < high real estate prices
    < difficult zoning
    < architectural review standards
    < abutters
    < historically difficult approval process

Our company took advantage of a situation like this approximately 6 years ago. We identified a location in an aging stagnant market. Our evaluation indicated that the age and condition of the existing supply provided a key opportunity. In addition there were few raw land sites. We developed a focus-serviced product that has become the number one performing hotel in the market because there were customers that wanted to stay in this particular marketplace but did not consider many of the existing hotels acceptable options.

Location

Once we identify an opportunity we begin to look at the basic elements and physical attributes of the site. We review things like;

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.