(IND) Construction inches upward in luxury and upscale segments

The dearth of new hotel supply, not surprisingly, led to a slowing of hotel construction over the past few years, but it is gradually making a comeback. More so in luxury and upscale properties, deemed to have a more stable return on investment versus lower-tiered properties. Green construction methods remain popular with designers and architects, and owners are interested in them for their marketing pull and potential return on investment.

David Chase, EVP, D.F. Chase Construction Recent projects: 
* Grand Palms Resort, Kissimee, Fla.
* Gaylord Opryland Hotel, Nashville, Tenn.
* Park Plaza Hotel, Nashville, Tenn.

HM: Identify the most important trend that influenced hotel construction in 2013?
DC: Debt financing became more available for ground-up hotel construction. The equity has not been that difficult to acquire for some time, but finding the right return for debt is still difficult.

HM: What trends will affect hotel construction in 2014?
DC: Built-in efficiencies and desired efficiencies will positively affect the life-cycle cost of a given asset.

HM: What are your industry forecasts overall for 2014?
DC: The debt financing market will start to loosen up a bit. Asset trading has already begun in certain markets. There is a movement toward developing more luxury and lifestyle hotels.

HM: What is your take on how hotel supply vs. hotel demand will play out in 2014?
DC: Lower-end supply is going to suffer. Limited and select-service properties are not going to demand the higher ADR they were getting in the past.

HM: What advice do you have for hotel owners and developers considering new builds or renovations in 2014?
DC: Pick the right collaborative design, construction and consulting teams. Work on streamlining processes and timelines.

Dave Pickus, director of marketing/business development, PWI Construction Recent projects:
* Metropolitan by Como, Miami
* JW Desert Ridge, Phoenix
* JW Marriott/Ritz Carlton Grand Lakes, Orlando, Fla.

HM: Identify the most important trend that influenced hotel construction in 2013?
DP: Green methods still play an influential role in hotel construction. They will continue to be embraced.

HM: What trends will affect hotel construction in 2014?
DP: The unpredictability of the U.S. economy and government is expected to directly influence hotel construction trends.

HM: What are your industry forecasts overall for 2014?
DP: There is a lot of pent-up demand, but business travel is still down. There is a huge inventory backlog for when personal and business travel picks up.

HM: What is your take on how hotel supply vs. hotel demand will play out in 2014?
DP: Renovations will be strong in 2014 and beyond. Pent-up demand and delayed renovations will come to fruition.

HM: What advice do you have for hotel owners and developers considering new builds or renovations in 2014?
DP: When the decision is made for a CapEx project, get a general contractor involved. The GC can assist the chosen designers and architects in the pre-construction process, saving time and money in each project.

Source: Hotel Management