Hotel News Now recently published an article about the opportunities that exist in the smaller hotel markets. With quotes from several speakers at the recent North American Hotel Investment Conference held in Chicago, the article stresses the importance of a hotel feasibility study when considering hotel development in these markets.
By:ED WATKINS/Hotel News Now
Published: December, 2014
CHICAGO—While the top 25 hotel markets in the United States get a lot of attention from developers and investors, there are great opportunities in second- and third-tier markets, said speakers during a panel discussion at the North America Hotel Investment Conference.
“Even during the downturn we saw (revenue-per-available-room) growth in our hotels in smaller markets,” said Ravi Patel, president of Hawkeye Hotels, during a panel titled “Below the top tier.” Hawkeye
is an Iowa-based owner and operator of more than 30 hotels, many of them in smaller markets.
“We were able to succeed then and now because we put customer-centric-branded hotels in markets where there had been no new development for quite some time,” he said.
The panelists said it is important to fully understand the dynamics of a smaller market before committing to develop or acquire a hotel.
“You need a feasibility study from someone who understands the market and the model you’re proposing,” said Brian Wogernese, president and CEO of Cobblestone Hotels. “You’re not going to be able to pull a STAR Report for Newton, Iowa, so you may have to look at a market 30 minutes away for comparisons.”
To read the entire article, click here.