6A — May 16 - 29, 2014 — M id A tlantic
Real Estate Journal
www.marejournal.com
D el M ar V a
By Greggie Pascual and Justin Kline, Colliers International The “Lifestyle” Hotel and potential impact on value
I
n today’s evolving land- scape, hoteliers want to cre-
tate. The overarching theme of the conference was ‘Lifestyle.’ The perfect
hospitality industry and the emergence of Lifestyle hotels as a subset of the boutique hotel market. Lifestyle hotels focus more on the guest expe- rience and less on products, such as loyalty points, offered by big brands. Rooms are now designed to be smaller as guests are spending less time in their rooms and more time search- ing for local, authentic experi- ences. David Pollin, co-Found- er at Buccini/Pollin, stated that developers are looking for ways to squeeze square footage from guest rooms to
allow more versatility with respect to food and beverage areas and common lounge ar- eas. Deanna Francl, Principal at Gensler, said that from a design perspective, people are interested more in the connec- tivity of a room and less with having a typical desk or chair. The most pronounced re- sponse to this idea of authen- tic experiences is in Food and Beverage. Hotels now partner with local chefs to develop restaurant options for guests as well as locals. Lifestyle hotels place restaurants in the front of the hotel, which
encourages integration with the community. Hotels are also starting to find alter- natives to traditional room service, which has long been an underutilized service with extremely high overhead. The Hilton NYC eliminated room service and instituted a grab- and-go section. Other hotels offer self-serve room service where guests place an order with the front desk and are notified when it is ready for pick-up. Responses to this new de- mographic and lifestyle are evident from the moment you walk into a Lifestyle hotel. Gone are the traditional lob- bies. Now, there are great rooms that feel like lounges, offering communal tables and cultivating the idea of “alone togetherness.” Tech- nology and ambiance are also emphasized. This design is rooted in our hyper-connective world; we want to be around other people while we work or socialize. So how will all this affect the valuation of hospitality? Firstly, the market value of a hotel is represented by the going concern; the value of an operating business enterprise, inclusive of real estate. It is the value of all the tangible and intangible assets, as if sold in aggregate. The components of this busi- ness enterprise value cannot be extracted; only allocated. With respect to these recent trends, values may or may not increase. However, assets may be redistributed from the tangible to the intangible of the going concern. Factors such as smaller rooms in exchange for a larger guest experience via common areas may redistribute income from room rates to other revenue sources. As appraisers, we must take into consideration this experience and new types of amenities and how they impact value. Greggie Pascual is a se- nior valuation specialist in Colliers International’s Washington, DC office. He specializes in hotel valua- tions in the mid-Atlantic region. Justin Kline is a valu- ation trainee in Colliers International’s Washing- ton, DC office. He teams up with Greggie to assist in valuing hotels in the mid-Atlantic region . n
ate an atmo- sphere that extends far beyond the guest room. Wh i l e a t - tending the Urban Land Ins t i tut e ’ s
Lifestyle ho- tel is one that e m b r a c e s the new de- mands of the hype r - c on - nected guest, namely that people want
Greggie Pascual
Justin Kline
Trends Conference at the Ronald Reagan Building in Washington, DC, we exam- ined the ways in which we work, live, and play and how that evolution affects real es-
to tell a story. With the popu- larity of social media, people are eager to blog, tweet, and Instagram their experiences. Hotels want in on the action. The seminar focused on the
HOSPITALITY Valuation & Advisory Services Market Insight Timely Delivery
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