What’s trending in hotels?
Airbnbs are here to stay. Hotels are expanding wellness facilities and activities. And the hospitality industry will continue to have more of a communal feel with mixed-use areas that can be used for community meetings and wine tastings.
Those were some of the trends highlighted by a panel Wednesday in downtown Richmond during an event sponsored by Urban Land Institute Virginia. About 92 people attended a wide-ranging discussion on the top trends in hospitality at one of Richmond’s newest hotel venues: the Belle & James at 700 East Main Street.
Moderator Doug Henkel, a broker who specializes in hotel deals and sales with CBRE in Norfolk, kicked things off with a question on how Airbnbs are impacting hotel operators.
According to him, CBRE research shows that from the third quarter of 2014 to the third quarter of 2015 Richmond had one of the highest increases in the number of Airbnb units, 290 percent, among the country’s top 59 metro areas. Coming in second was Hampton Roads. Airbnb is an online platform that allows property owners to rent out homes, apartment or houses to short-term travelers.
Henkle speculated that last September’s international bike race in Richmond could have caused those figures to spike.
The topic is timely as the General Assembly is considering bills to legalize and regulate Airbnb. “How does a platform like Airbnb change the hospitality industry? Henkle asked.
Neil Amin, CEO of Shamin Hotels, one of the largest hotel operators in Central Virginia, and the firm behind the redevelopment of the Belle & James, said Airbnbs put pressure on prices, especially in expensive hotel markets such as New York and San Francisco.
While that’s not so much a concern in a secondary market like Richmond, he said, research shows that people who had rented lodgings through an Airbnb would do it again. “That shows that people enjoy it. That shows that it’s here to stay.”
Amin and others on the panel raised concerns about the need for more regulation to ensure client safety and to allow localities to reap the tax benefits of these enterprises. Henkle called the trend “the uberization of the lodging industry … It will only take a few events of someone being tragically injured or even killed for communities to clamp down on it,” he said.
Panelists also were asked if the millennial generation is having a disruptive influence on the hotel industry. “If you don’t have a website you can access over a phone, you are already gone,” said Amin. The generation that grew up with computers and mobile phones demands the latest in technology and wants an authentic experience that appeals to their senses, he added.
Paul Cooper, a principal with Richmond-based Retro Hospitality, said he is seeing this shift in expectations among other age groups as well, “not just the millennials.” The hotel experience “has to be more local,” he said. Gone are the days when hotel brands could pride themselves on consistency with rooms all looking the same no matter the city.
Another challenge for hotel operators is workers. “We’re all fighting for employees,” said David Rochefort of Chicago-based AJ Capital Partners.
As the labor force ages, hoteliers are worried that it will be harder to fill positions such as housekeeping. Other trends, such as keyless rooms, means hotels won’t need as many workers in some areas as a result of technology.
In a nod to client desire to stay healthy and well while traveling, hotels are building larger fitness centers. “It’s the new pool,” said Amin. It’s a place where people go to work out and to see other people. From healthier menus to rooftop- or in-room yoga, fitness is a huge trend.
For companies that don’t have the money to build a full-fledged spa, Cooper’s company has an affiliate called Box Spa. These 640-square-foot, spa-like structures – made from restored shipping containers — can be leased and erected near a pool, on a roof, or wherever a hotel wants to offer spa services at a fraction of the price that it would take to build a spa, Cooper said.
Despite the industry’s challenges, many companies are in expansion mode including Shamin Hotels. Amin said his company is building two new hotels in the Short Pump area of Henrico County that are scheduled to open in 2017. The projects are a 138-room Home2Suites by Hilton, an extended stay hotel in the Towne Center West Development, and a 122-room Hampton Inn & Suites on West Broad Street.
Shamin also has added two new hotels at the Belle and James property, which has been readapted from its previous role as a 19-story office tower. Already open is a 100-room Homewood Suites while a 144-room Hampton Inn & Suites has been opening in phases. The project cost about $40 millon.
AJ Capital Partners plans to build one of its Graduate hotels in Richmond in a location close to VCU, because of the growth in and around that area, Rochefort said.