DFW's Indie Hotel Takeover
Get ready to see more soft brands—Marriott Autograph, Hilton Curio, and the Ascend Collection are names to watch—as markets get saturated with the big chains.
HREC Investment Advisors VP Hank Wolpert (center, on a recent property tour with Michael Meehan and Harry Greenblatt of Pyramid Hotel Group and Len Howell and Sushil Israni of Pacifica Hotel Group) says DFW is already seeing the soft brand movement when the Hotel Palomar recently morphed into a Hilton Curio and became The Highland Dallas.
The brands have now realized that they might not be able to put another Hilton into a neighborhood, but they can go after an independent hotel by offering them a soft brand, which allows them to be affiliated with the big brands like Hilton, Hank tells us. The hotels are paid handsome fees for it and they get the brand’s marketing and reservation system without having to look like all the rest of the Hiltons. Another Metroplex hotel with soft branding is the Liberty Hotel in Cleburne, which is part of the Ascend Collection by Choice Hotels.
Another trend: the furious race to acquire hotels because of the exceptional amount of capital chasing hospitality, Hank says. Some assets are getting up to 40 confidentiality agreements signed within a day or two, he tells us. Hotel owners are taking advantage of this high point in the cycle to sell their properties, and private equity funds and REITs are paying prices that would've been unbelievable a year ago. Investors will love their fundamentals once they close an acquisition—CBRE Hotels first VP Bert Stevens (pictured) says room revenue growth in Texas went up 8.4% over the same time last year. Yet another trend will be tempering the sector in a few years: New supply will eventually catch up with demand. (But you can take Bert out of that demand—when he gets some free time, he likes to take his 35-foot RV around the state parks of Texas.)