Commercial Real Estate Trends: The Latest in Hospitality
This article is part of a series covering recent commercial real estate trends by asset class.
2020 has been a year of change.
In fact, the changes have been so drastic and widespread that you rarely hear anyone utter the word normal without first adding the word new.
That’s been just as true for commercial real estate (CRE) as it’s been for our day-to-day lives.
In Part 3 of our series on CRE trends, we’ll cover how those changes have affected the hospitality sector.
Hospitality trends you need to know
The COVID-19 pandemic had an undeniable impact on the hospitality industry.
As people cut back on travel and spent more time at home, hotels began struggling to fill rooms and bring in revenue.
And some experts are predicting a tsunami of hotel closures.
Unfortunately, these challenges aren’t likely to end soon. Research from McKinsey & Company suggests “recovery to pre-COVID-19 levels could take until 2023 — or later.”
So, how are hospitality leaders navigating this challenging market?
According to CNN, they’re investing in amenities that reduce the risk of spreading infectious diseases to make guests feel safer.
“Most properties are pledging best practices according to CDC and EPA guidelines such as frequent cleaning, air-filtration systems, contactless check-in and decreased capacity,” the article stated. “Others are taking the opportunity to innovate, brainstorming new ways to make guests feel secure and relaxed, which range from luxe to odd.”
The article went on to list some of the new safety amenities hotels are offering, including:
- On-site medical care
- Touchless equipment
- Sanitizing stations
Still, for many hotels, safety amenities alone aren’t enough to entice guests.
According to The New York Times, “As the hospitality industry grapples with a severe downturn, owners are turning hotels into offices, schools, emergency housing, wedding halls or homeless shelters.”
And an article from CNBC detailed the emerging trend of hotels promoting schoolcations — where they provide tutoring and tech support service for students learning remotely, so parents can enjoy some child-free time during the day.
Others are going to even greater extremes.
According to Biznow, Dream Hotel Group has “hosted events that lure people into staying at the hotel for a day or so, including a drag brunch at the rooftop pool at its hotel in Durham, North Carolina, and a poker party package with BBQ service for $650 per night.”
- The COVID-19 pandemic hurt the hospitality industry, and the recovery period is expected to last until at least 2023.
- Hotel leaders are investing in safety amenities to ensure guests feel safe.
- Many hotels are offering unique services — everything from providing office space and school assistance to hosting drag shows and more — to increase revenue.