News for the Hospitality Executive |
Hotel-Retail Mixed-Use: Hospitality Industry Trend for 2013 |
For the most
recent update on this topic, click here By Jim Butler and the Global Hospitality Group® Hotel Lawyers | Authors of www.HotelLawBlog.com December 19, 2012 A wave of
"hotel-retail mixed-use" is coming. It may mark the rebirth of bricks
and mortar. What's behind this trend is a simple and powerful driver: The right hotel added to the right project can boost retail sales by 20-40%! And the retail shopping can boost hotel RevPAR by a comparable amount over the competitive set. My partner, Guy Maisnik, and I were asked by Globe St to write a guest column for their publication on the hotel-retail trend. It is reprinted below, with permission. Hotel-Retail Mixed-Use: The
rebirth of bricks and mortar Over the past 5 years, the retail sector has improved substantially, along with the economy. We are now at the dawning of a renaissance in retail, which includes adding a hotel mixed-use component to shopping centers and malls. An important part of this revival is rediscovering and remembering the compelling analyses and technology that has been largely set aside or forgotten in the wake of the Great Recession. Adding the right hotel component to retail, in a well-structured hotel-retail project, can provide a powerful competitive advantages for both the retail and the hotel components. The competitive nature of retail demands that owners and managers implement strategies that entice customers to their locations for a unique shopping experience where they can enjoy the latest consumer trends. Competition for consumer shopping is not only with other retailers but extends to internet sellers. Just before the Great Recession, our hospitality and real estate lawyers were working with one of the nation's largest retail center owner-developers, which had studied the hotel-retail synergies very carefully. Compelling
examples and studies The client had 6 major projects and master planned communities where it could study the impact of hotels on the shopping centers and malls. Some of the projects included the Ritz-Carlton Tysons Corner Galleria, Westin Dallas Galleria, and Ritz-Carlton Water Tower Place. Its findings were compelling. After a multi-year study, the company concluded that its 200 property portfolio was "capable of supporting 80 near term hotel developments ranging from extended stay to select and full service product." They found that a hotel adjacent to retail results in a substantial boost to both the hotel and retail components -- the increase in revenues ranged from 20-40%! They found that a hotel adjacent to retail results in a substantial boost to both the hotel and retail components -- the increase in revenues ranged from 20-40%! It's difficult to ascertain exactly what accounts for this revenue increase. But according to the U.S. Travel Association, more than 3 out of every 4 (77%) U.S. domestic trips are for leisure, and for many years, "shopping" has been the #1 or #2 travel activity for leisure travelers (others in the top 5 are visiting relatives, visiting friends, sightseeing, and beaches). And a hotel-retail center creates more excitement, synergy, and a greater sense of destination, then "just going to the mall." A major
hotel-retail trend is underway A final caution This article first appeared in the December 17, 2013 edition of Globe St (www.globestreet.com). Click here to see the original. This is Jim Butler,
author of www.HotelLawBlog.com
and hotel lawyer,
signing off. We've done more than $60 billion of hotel transactions and
have
developed innovative solutions to unlock value from hotels. Who's your
hotel
lawyer?
__________________________ Our Perspective. We represent hotel lenders, owners and investors. We have helped our clients find business and legal solutions for more than $60 billion of hotel transactions, involving more than 1,300 properties all over the world. For more information, please contact Jim Butler at [email protected] or +1 (310) 201-3526. Jim Butler is a founding partner of JMBM, and Chairman of its Global Hospitality Group® and Chinese Investment Group™. Jim is one of the top hospitality attorneys in the world. GOOGLE "hotel lawyer" and you will see why. Jim and his team are more than "just" great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. |
Contact: [email protected] 310.201.3526 |
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