This summer’s leisure boom and general rebound from COVID-19 is prompting developers, operators and designers to rethink what the next few months will look like.
Some of the industry’s top construction and design leaders recently converged to discuss the evolving landscape and what it will look like moving forward. Shannon Seay, senior project manager at construction project management firm H-CPM; AnaTracey Hawkins, senior vice president of strategic growth at construction and development services firm CNY Group; Dina Lamanna, senior project interior designer at design and architectural firm HOK; Alec Zaballero, managing executive and studio director at TPG Architecture; and Paolo Trevisan, vice president of design at design firm Pininfarina of America recently sat down to discuss the state of the industry and where they see the most potential within the market.
Here are some highlights of their discussion:
Q: As we look to the future, what do you see as the biggest opportunities for your segment of the industry?
Shannon Seay: As we look forward to the next few years, I think there is an unprecedented opportunity for conversions, not solely between brands but also in repurposing commercial buildings (ex: office fit-out) to hotel keys and amenities. The pandemic has uniquely positioned each asset to have negotiating power with the brands; when it comes to PIP deadlines and waivers, this is the time to negotiate prior to demand returning to 100%. Lastly, in the wake of the pandemic, tourists are eager to travel and are seeking unique, exciting, and comfortable experiences. How can your hotel renovate to provide added amenities?
AnaTracey Hawkins: We are working with owners and investors who are considering how they may maximize asset value or diversify risk associated with some of their older hotel stock in Manhattan. Some of their considerations include conversions to residential, student housing or senior living. We have been working to assess the viability of these changes in asset class and how construction costs may impact profitability.
Dina Lamanna: We’ve had strategic conversations with luxury and upscale brands and there is a true focus in conversions and mixed-use, including F&B and retail. Some are even thinking about including workplace in the mix: how can you incorporate different kinds of working environments within a hotel property. For instance, instead of assuming every corporate traveler is going to do the work in their room or instead of having small meeting rooms on property, is there some kind of pod or some kind of extension to the hospitality program? Something like a Neue House built into a boutique hotel. And in the same building you can grab a bite to eat or go to a branded gym. It’s about destinations guests understand and know, coupled with a hospitality brand. It’s like building a mini community.
Q: At the property level, can you describe which asset classes are gaining traction? Any that are getting less attention?
Lamanna: I think the pandemic will change the mid-level properties the most. Select-service, that I don’t think is changing; they already have their bones. The US$89 special, they’re going to live and die at that position. Then you have the top 20% luxury aspirational exclusive experiences; they’re not going to change because there’s going to always be an appetite for that experience. I think where we will see the most change is with 3- to 4-star-plus brands where you get a mix of recreational and corporate travelers. They might want to see some changes or they might have to make some of those changes based on their company’s values, or their own values. Restaurants and that level of service is still important, but a great ability for the grab and goes to take off and be done in a more boutique way, stylized like at a catered museum because it is individualized and package but it wants to have this sort of fresh attitude that it feels catered to those particular guests. I don’t see a lot of operators offering the buffet styles and again, even at the luxury level.
Q: How might the rise in remote work impact the hospitality industry? Will different types of service offerings emerge in response?
Hawkins: As more businesses adopt remote or hybrid work policies long-term, we expect to see the travel habits of the workforce change. Pre-pandemic, there was an entire level of service devoted to business travelers with an average 36-hour turnover. Now, we are finding that young people are the ones regularly traveling during the business week and they are more inclined to stay in a city for longer periods of time. With no requirement to pay rent or to live in one location permanently, many are using this opportunity to see different parts of the country. To meet the demands of the new demographic of travelers, hotels must make changes that are more suitable for longer stays –– such as larger floor plans and kitchenettes. Travelers look for experiential outdoor environments, so in New York that means transforming roof tops and build setbacks to accommodate more outdoor spaces. We are already seeing owners and operators making these changes.
Lamanna: One luxury brand recently asked about the desk and its background, being able to curate a specific moment within the guestroom. As many of us will continue to work via video conferencing even when we return to our offices, this idea of helping guests remain professional while working in this way from a hotel room is interesting. Instead of putting the headboard across from the desk, where it would appear on camera, maybe there’s a little look and you rotate the desk off of the wall so you have this interesting wall or casegood screening behind the person so it creates a setting personalized to that viewer.
Q: What should owners be taking advantage of now?
Hawkins: We have been working with some of our clients to take advantage of the low occupancy for renovations, upgrades and changes in programming. Keeping a hotel open during a renovation project presents a variety of operational, service and logistical challenges. In pre-pandemic times we worked with owners and operators on long and complex phasing plans to balance construction access against the needs and safety of hotel operations staff and guests. This allowed construction to progress while keeping the property partially open and generating revenue. Now we have the unique opportunity to work faster with much less sequencing, which will save money and time while meeting the anticipated return of New York City’s robust tourism industry.
Seay: As teams debate when to release development projects, please know that the time is now. Due to the raw material and freight shortages, the timeline for procurement of overseas goods and material has extended substantially. If your team wants to renovate in Q3-Q4 of 2022, design should begin immediately so that specifications are complete this year, leaving ample time for procurement and freight.
Q: The last 15 months or so have been quite volatile for the hospitality and travel sectors. From your perspective, what has been the biggest impact of the pandemic on your segment of the industry?
Seay: Perhaps the largest impact on development has been the stoppage of freight/manufacturing followed by the subsequent raw material shortages, container/vessel shortages, and freight inconsistencies. Whether your team is considering new construction or renovations, the material shortages are pervasive throughout the construction industry, which ultimately require additional time and funding on each project.
Q: What are some of the most significant challenges that must be overcome for brands or operators to compete as summer travel picks up momentum?
Alec Zaballero: Brands and operators have to navigate through the complexities of what we hope are the late stages of this pandemic. The imperative is that they give travelers a sense of safety and security, which requires some visible health measures while embracing and welcoming their clientele.
Paolo Trevisan: Over the next six to 12 months, consumers will be giving everything a more critical look, from their homes to their vacations. As such, we believe that sustainability –– especially principles of biophilia (access to natural light, green space, etc.) –– will continue to be a topic on the forefront of people’s minds, and we anticipate that it will be a measure used to determine consumer preferences more than ever.
Q: What types of experiences are travelers looking for today? How are brands responding?
Hawkins: First and foremost, travelers are expecting a clean and safe experience. Even with vaccination rates on the rise around the country, owners will need to continue their vigorous sanitization policies until there is widespread public agreement that such measures are no longer necessary. This is a challenge for many properties today, as they have not yet returned to pre-pandemic staffing levels and have many related cost constraints. The concern over sanitary conditions has encouraged owners to adopt pre-pandemic changes in technology more aggressively. This has served a dual purpose of modernizing their properties while meeting guest expectations for cleanliness. These technologies include contactless check-in, voice or application-command technology and keyless entry to guestrooms.
Zaballero: Travelers today are certainly expressing a pent-up demand for the experiences and luxuries they were denied during over a year of lockdown. For them, their travel is part of their self-care regimen. They want to feel welcomed, pampered, fortunate and safe. Smart brands are responding by offering a balance of the familiar with the new, and keeping interactions and spaces personal and intimate.
Lamanna: Ultimately, it is about going back to the roots of universal design: at the end of the day there’s going to be some new answers that we add and we pivot with, but great design should feel timeless effortless. The guests should have a memorable moment, but it shouldn’t weigh on them so heavily visually. The basic principles of design are still in style around trends.