Experiential Travel, Co-Working Will Buoy Hotels This Year
JLL report sees experiential travel and co-working as two opportunities for hotels to boost revenue.
Chicago, IL—Global hotel transaction volumes totaled nearly $68 billion in 2018. This year, global real estate markets are expected to post slower growth. Hotels will be affected as well, but those properties that focus on fulfilling guests’ needs for high-end experiential travel and co-working should do well, according to JLL’s 2019 Hotel Investment Outlook report.
With luxury consumers increasingly seeking out new and unique experiences while traveling, hotel markets are seeing a strong demand for high-end experiential travel as demonstrated by the RevPAR growth not only in the US luxury resort sector, but also in such global destinations as Rome, Singapore, Paris, Bangkok, Florence, Maldives and more.
“Hotel guests nowadays just don’t want to arrive at a destination and sit on a beach anymore. They want more use out of their time as the spa and pool simply doesn’t work anymore,” says Jeff Davis, Co-Lead of Americas Hotel Capital Market, JLL.
People want to learn more about their locale, immerse themselves in the culture, and sample the local dishes. As a result, hotels are partnering with their surrounding communities to offer cultural programming plus offering onsite classes in bread-making, for example, or wine tastings, Davis tells GlobeSt.com.
There has also been a strong demand for communal workspace since significantly more companies offer flexible working policies. These spaces, if correctly designed, are the best place for the next generation of consumers to socialize and work. In response, hotel operators are beginning to maximize their real estate and boost revenue by creatively repurposing existing, underutilized spaces.
“Consumers are always seeking a work/life balance. One of the trends JLL foresees is people staying in hotels where they can also work. Operators are now transforming parts of their large atriums and lobbies plus unused rooms into revenue generating spaces,” says Davis.
For example, The Virgin hotel in Chicago charges a membership fee for its co-working space where the fee includes a bar, private meeting areas, free tea and coffee, a library, Wi-Fi and wireless printing. Similarly, The Curtain hotel in London offers co-working facilities exclusively for its hotel guests and members.
Even with some global uncertainty, hotel investments will continue to remain strong in 2019 especially if hotels continue fulfilling their customers’ needs.