Buckhead's New Stock Of Hotels To Rely On Food, Locals
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There is a merging of trends that are benefiting hotel developers.
On the one hand, hotel customers are growing younger and want unique experiences in boutique hotels, but in the heart of urban centers. At the same time, mall owners are looking to get rid of the sea of asphalt around their properties with new developments.
Hotel developers are taking those desires and building lifestyle hotels on mall properties, Songy Highroads CEO David Songy said.
"It's really hard to find a parcel in Buckhead to do something of that magnitude,” Songy said.
Songy was part of a panel of hotel developers at Bisnow's Future of Buckhead event last week, including Cartel Properties partner John Frasier and Regent Partners President Reid Freeman.
Songy is in the process of securing financing for a $75M, 214-room Hyatt Centric hotel on the Lenox Square mall property along Buckhead's Path400 Greenway Trail. It is one of a handful of new hotels planned in Buckhead, including The Dream Hotel being developed by Cartel and a Thompson hotel being developed by Regent Partners and The Loudermilk Cos.
But a room and bed is only part of the secret sauce to the success of the new lifestyle hotels rising in Buckhead. The other part is the food and beverage offering. Chef-driven restaurants and cocktails have been rising stars in the hotel industry, especially as properties attempt to draw customers in who may not even be sleeping in a room.
Total food and beverage revenue per room climbed 2.6% to $108, according to the F&B Star report in 2018. At the same time, revenue per available dining seat in hotel restaurants jumped nearly 5% to $47, according to the report.
Freeman said for the restaurants and bars in a local hotel to be considered a success, 60% of the business needs to be generated from local customers.
“Our hope is that we will be able to have food and beverage that [draws] a mix of ages and a mix of people around Atlanta ... someplace that the locals adopt as their own,” he said.
Cartel's Frasier said The Dream also is focusing on retail along with bars and restaurants to draw customers in. It is a trend that even has Buckhead's older properties reconsidering designs, including The Palm restaurant at the Westin Atlanta Buckhead, which underwent a major renovation in 2015.
“They pulled the bar out of The Palm and put it dead in the middle of the entry when you come in,” Freeman said, adding that it helped to activate the entire Westin lobby.
"If you go to a Moxy, you check in at the bar. They give you a drink while you wait,” CBRE First Vice President Amy Fingerhut said. “We'll see more and more of that in the hospitality arena.”