Excerpt from CoStar

Wave of New Brands on the Horizon Renews Skepticism Around Proliferation

Hotel industry development and investment executives speaking during the "C-Suite" panel at the Meet the Money conference said brands need to be careful to not ignore legacy brands as they unveil new ones.

Among a host of challenges facing hotel developers and investors, improving brand relationships often falls under the radar, but executives said the industry is at an inflection point when that work becomes even more important.

On the “C-Suite” panel at the 2023 Meet the Money national hotel finance and investment conference, Mehul Patel, managing partner and CEO of NewcrestImage, said there’s a new challenge facing the hotel industry every six months.

“The new norm is very volatile,” he said. “You have to stay in front of it and manage your business in a very clear thinking that you are going to navigate those challenges as they come up one at a time and prepare your balance sheet based on those challenges.”

Still, opportunities to improve relationships with the hotel brands and developer can't be overlooked, Patel said.

“We have to find a way to work with our brand partner and really improve that relationship over time, and I hope we can all collectively educate the brand partner to say they have to invest in their business,” he said. “That would ultimately benefit our entire industry.”

Greg Friedman, CEO of Peachtree Hotel Group, said the biggest risk of the hospitality industry being disrupted is the lack of investment in technology from brands. He said other industries increase productivity through these investments, and it increases the efficiency of the business.

“When you look five to 10 years down the road, [brands] need to get ahead of the curve because historically we’ve just underspent on technology,” he said.

Striking the right balance between technological efficiencies and guest interaction needs to be taken into consideration as well, Friedman said.

Francis Lively, president and CEO of The LCP Group, said it’s interesting to see the operational efficiencies from increased technology, but it will never fully overtake the need for human staffing.

“Something we’ve learned over the last few years — human connection and interaction is pretty valuable to all of us and I don’t think you’re going to replace that,” he said. “I don’t think that’s necessarily a good thing for our industry.”

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