5 trends shaping the hotel construction market | Property Invest Blog

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5 trends shaping the hotel construction market


Financing of investments in the hotel business is developing at a tremendous pace, compared with last year, demand has increased by 30%.

According to world statistics, the economy has been increasing in the major cities of the world, which explains the placement of investments, and the redistribution in more profitable ways. Interested investors are asking partners to respond to trends that shape today’s demand for the hotel business market.

“The faster and the more efficiently the hotel is opened, the more attractive the project is for the partner.”

Don Harrier is the managing director and leader of the hotel business.

The market of hotel corporations generally develops slowly and brings the investor 4-8%, while the small, posh hotels in the right locations, develop immediately and bring 12-22% per annum. Movement is formed around existing assets – work on the renovation and rearrangement of premises.

New trends to form the demand for mini-hotels:

  • Millennial choice;
  • Presence effect;
  • Reconstruction of hotel facilities;
  • The hotel as part of life;
  • Value-oriented approach.

Trend 1. Millenial preferences: special, unique and local hotels.

Design are formed not only economic trends, but also of the owners’ need to attract Millennials, whose tastes generally differ from the tastes of the parents.

For example, in the experience of Property Invest, topical issues are environmental friendliness, well-being and originality, which in turn create the demand for hotels among guests.

To increase the demand, properties of hotels are carefully adapted to the needs of the end consumer, because a well-thought-out concept interprets the context with a modern hand, which is sophisticated to the expectations of consumers.

For example, to apply a special design vision in a new boutique hotel.

Trend 2. Using non-standard hotel buildings to create a sense of place

Using the format of existing objects is a new strategy for matching local architecture. This does not mean that a historic site should immediately be transformed into a 5 star hotel. Turning objects into functional, hotel-oriented projects that take advantage of the location in the city center.

Having the historical character of the premises, implies an additional incentive for redevelopment, which adds a unique difference from other typical objects. This represents a reasonable investment. Advantages of structures built in the late 1800s and in the first few decades of the 20th century are preferred, especially when they offer great height from floor to ceiling and adjust to natural ventilation combined with modernist structures.

Trend 3 Reconstruction of existing hotel facilities to meet demand and rising consumer expectations

The need to remain competitive also leads to reconstruction from hotel to hotel, including upgrading one object, as well as converting to another brand concept. This shows again that the standards are changing depending on what the guests want today and in the future. The layout of the premises, guest bathrooms and design are developed in accordance with the target customer base of each brand and according to technological changes.

For example, Property Invest offers customers new types of platforms to tempt future guests with competing objects. Using the views of the resort experience to diversify the provision of services in hotels for maximum profit.

Trend 4. Updated popularity of projects, a combination of a hotel and other functions

A mixed-use model of premises, including hotels, is gaining momentum in thriving urban centers, combining the hotel with rented and sold housing and offices. Residential components held for sale in the relevant market can help finance development by providing a lower initial financial risk. Today, projects with a smaller area are popular, including serviced apartments, a luxury hotel, stunning views.

In a central location, multilevel schemes are more common. Transit-oriented versions of mixed-use include hotels and apartments with no retail or entertainment component; another option conference rooms associated with sports facilities, consists of hotels. There is a tendency in hotel projects related to major events, as they make more sense in terms of financing. Demand on hotels comes back, but they must be a part of a wider history in order to be a part of the whole life.

Trend 5. Increasing the category of “choice of services”, reducing the gap between luxury and economy segment

Optional hotels – traditionally set as objects out of restaurants and banquet halls – are also appealing. This sector is a priority type among new construction kind. Today’s select-service version covers a full-fledged conference hotel, a simple estate. Properties can include business centers, mini-shops, indoor or outdoor pools,  fitness rooms, guest laundry,small meeting rooms and modest restaurants. Whatever the mixture, the type of building radiates an image of value.

A business traveler and vacationer appreciates economical cost. Travelers are attracted by the “choice function” because it offers guests everything they need. Large banquet rooms, a huge selection of restaurant menus, various services available in the hotel with the whole range of services are excluded, which makes it possible to pay guests a great price for a great room. Most conservatives consider choice as a risky proposition. Regardless of scale, uniformity is no longer for sale.

Short summary:

The economy of scale is attractive, and no one wants to reinvent the wheel. But the traveling guest will give preference and pay for impressions, which is more than one night in common property. Individually created projects represent a greater potential income for investors than simply replicating prototypes.

5trendsrtProperty Invest considers each project as a one-time project from the standpoint of design to create a unique individual property. A cautious approach help to coordinate, to schedule the design, resolve issues in advance. We are playing up the competition in the market, at the same time with the help of the purchasing power.

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