At NABHOOD’s 28th Annual International African American Hotel Ownership & Investment Summit & Trade Show, development executives from four major brand companies took to the stage to discuss their most popular brands and current industry challenges.
Moderator CJ Arlotta, managing member, CJ Media Solutions LLC, asked what type of hotels hoteliers are presently looking to develop.
“I think, for all of us, extended-stay has been the place to be,” said Bill Fortier, SVP, development, Americas, Hilton. “Everybody is coming out with new ways to get into this segment.”
Noah Silverman, global development officer, U.S. & Canada, Marriott International, also went with extended-stay, adding, “Two of our most recent launches have been in the extended-space space. One is at the premium tier of the market, Apartments by Merritt Bonvoy. The other, Studio Res, is in the midscale tier.”
At IHG, the dual-brand concept of pairing a short-stay brand with an extended-stay brand has been catching on with developers, according to Shawn Siemers, VP, Eastern region, franchise sales & development, IHG Hotels & Resorts.
“Whether it’s Candlewood suites, Staybridge Suites or Atwell Suites in our portfolio, that concept certainly resonates with hoteliers,” he said.
The discussion turned to the current lending environment, which has been one of the major challenges facing the industry.
“Probably the single biggest challenge that the industry is facing right now is both the availability of capital and the terms of financing when it is available,” said Silverman. “I do think we will see some declines in rates coming in the second half of this year and that will help. But it’s still a very tough environment, and it’s one of the reasons I think branding is important for banks.”
The moderator asked about tips for first-time hoteliers to find investors. Fortier pointed out that the NABHOOD Summit was a good place to start, as there were attendees that put little sliver equity into different deals all the time.
He then offered some advice to first-time hoteliers: “Go to the conferences, talk to the brand teams and talk to your neighbors. Go to the hotel, work as a GM for a couple of days or a month or two. Know how all of these things work, so that you can actually be an asset to that next deal.”
When asked if the brands can help with financing, Amit Sripathi, chief development officer, Wyndham Hotels & Resorts, said, “We have a variety of tools to help franchisees with growth and that may include key money and financial support, but it also is a lot about education and operational support.” He brought up Wyndham’s Women Own the Room as an example of a program that can help new hotel owners learn about the business.
