Thinking small is becoming a bigger trend in hotel development and acquisitions in secondary and nearby top-tier markets, mostly due to consumer demand for upgraded amenities and modern operations, as well as the willingness of lenders to book smaller debt for the less-expensive properties.
Much of the drive in acquisitions is new standards in operations and services that upgrade the meaning of limited-service, such as expanding social amenities for guests during evening hours and increased free breakfasts, 24-hour stores and other services. The modern business traveler watching the bottom line wants the amenities found in a mid-scale full-service hotel, from full business and fitness centers to wireless internet. A recent Ernst & Young's Hospitality Investment Survey shows that while the luxury segment will continue to outperform other sectors in ADR growth, 'the other distinguished segment is mid-scale, without food and beverage, which benefits from relatively low construction costs, accessibility to a wide-franchise market and higher operating margins with comparatively lower execution risk.''
The Providence Group LLC, headquartered in Duxbury, MA, is a full-service hotel management and consulting company. Providence president Jed Heller tells GlobeSt.com that the upside in new management for the right properties is modern efficiencies large third-party management companies can provide. Providence also provides construction management for renovations to reposition properties where it has management contracts. Heller says he is 'focusing solely on small to mid-sized hotel management opportunities.' An example is the 70-room Sanhurst Hotel in Fort Pierce, FL, flagged as a Holiday Express. It was ranked fifth out of seven hotels in RevPar for 2006 in its market. EOY 2007 shows the hotel's RevPar rise from 43% to $55%, while reducing costs and spending, and came in number one in occupancy and RevPar in '07 in the Fort Pierce area.
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Source - Globest.com
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