Executive Insight: Hunter Hotel Conference
The Hunter Hotel Conference brought out insights from every corner of the industry, marking potential upsets and opportunities to gain ground for U.S. hoteliers in 2018. Vice President of Development Charles Snyder explains the biggest takeaways regarding the conference’s hottest topics, New Supply and Labor.
Nationally, the new construction pipeline is tapering off below the level we saw at the peak of the last cycle. This is good news for most hotel owners; however, it’s important to look at the data market by market. While cities like Austin, Seattle, and Nashville are expecting supply growth in excess of 6%, other markets like St Louis, Jacksonville, and West Palm Beach are all well under the long-term average of 2%. Furthermore, 70% of the pipeline consists of economy, midscale, and upscale select service hotels. Consequently, some markets and segments will soon be saturated with new competitors. As an owner it’s important to predict how this scenario will play out in your market: is there new competition coming online that will be directly or indirectly compete with your hotel? How will your hotel be perceived among travelers when a new competitor opens? Charlestowne works with owners to identify their competitive advantage through detailed branding studies and a complete operational analysis. We craft a unique positioning and voice for each property, regardless of branded or independent affiliation. When warranted, we oversee the renovation and subsequent repositioning of assets to make sure the product both resonates with guests and distinguishes itself from competition.
Industry research firm STR is projecting slightly improved RevPAR growth of 2.7% for 2018. While this is great news for a continuation of our record breaking cycle, one disappointing takeaway emerges when you consider our industry’s largest expense category: wages. Many economists are projecting an acceleration in wage growth between 3% and 3.5%. This means owners and operators must focus on operating efficiencies and lowering non-wage expenses wherever possible. At the same time it’s very important to retain talent as many markets have returned to levels of full employment. Recruiting and training new employees is very costly, so Charlestowne emphasizes corporate training programs to develop and retain talented individuals among our portfolio of hotels.