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5 Big Hotel Trends Affecting The Industry Today

From the customer experience and how to balance dual brands to whose driving hotel supply and the fate of the front desk, here are five trends in the hotel industry we learned at our Atlanta Hotel Development Forum this week.

1. Individualized Experiences

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From health-conscious to hyperlocal-themed hotel brands, going forward, hotels will all strive to create an “individualized experience,” said Peachtree Hotel Group's Mitul Patel.

And that's important, because hotel customers will pay for a better experience, even if the rate is more than an average hotel, InterContinental Hotel Group's Adam Glickman (above), who handles IHG's EVEN brand, said. And a guest experience is important, since people will be quite candid on opinion and review sites like TripAdvisor.com.

2. The Dual-Brand Strategy

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Sticking two hotel brands under the same roof is a recent trend being seen across the country. Even in Atlanta, Noble Investment Group is underway with a dual-branded AC Hotel and Marriott Moxy in Midtown.

Mitul said there's good reason to do them—dual brands allow an owner to knock out potential competition in a single market, while also spreading facility costs out between two flags.

“But you've got to have a market that has true depth of demand to absorb,” Mitul said.

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Other panelists—including DRB Consulting's Donald Boyken (who moderated), Condra Group's Scott Condra and Cooper Carry's Keith Simmel—said dual-branded hotels have their own challenges. Design is a big one.

Some hotels share elevators, some intermingle front desks, and a Courtyard by Marriott and Residence Inn underway in Washington, DC, mixes the different brand hotel rooms on the same floor, Keith said. Adam added that hoteliers need to be careful and be sure to mix brands with “similar service cultures” to avoid confusing the two brands with customers.

3. Banks Dictating Supply

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The supply of new hotel units in most metro areas is being constrained by a slowing bank lending environment, an issue addressed by our second panel at the Atlanta Hotel Development Forum earlier this week.

Banks are really driving the supply more and more,” Scott said, adding that Basel III regulations are keeping banks from adding more CRE loans to their portfolios, which is creating a “soft landing” in the hotel development market.

Mitul added municipalities don't make it easy to build new hotels either, even if you can manage to get construction financing.

In "Alpharetta alone,” he said, "the entitlements are almost impossible now."

4. The Front Desk Isn't Going Away Anytime Soon

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While some hotel experts predict that technology will eventually kill a hotel check-in desk, some of our panelists insist that age-old feature is still critical.

“We're innkeepers, and part of that role is customer service,” Adam said, adding that the front desk is the “hub” of the customer experience at EVEN. “Our view is the front desk will never go away.”

Keith noted his firm is working on an Autograph Collection hotel that has a front desk at the moment. But it's designed to eventually become an extension of the bar if/when front-desk check-in becomes a thing of the past, he said.

5. Airbnb Impact Is Still Being Assessed

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HVMG Chief Development Officer Mary Beth Cutshall

What's the impact that Airbnb is having on the hotel industry, especially since the room listing service has some 51 million units across the globe?

“We're just scratching the surface,” said HVMG's Mary Beth Cutshall. “There's some disruptors in the mix that we have never dealt with before."

Paramount Hospitality Management's Nick Lakha echoed those sentiments. “I think a lot of us didn't take it as a real player three, four, five years ago.”

He added that Airbnb can't compete with traditional hotels on providing a customer experience, especially for that lifestyle-focused traveler.