OnSiteIQ’s CEO Ardalan Khosrowpour and CSO Nick Muir attended the NYU Hospitality Investment Conference in New York this past month to get the latest and greatest in construction investment. Specifically, this event attracted over 1,000 of the preeminent hospitality professionals who were eager to hear from a stellar lineup of global leaders and influencers in the industry.
Based right in the heart of New York’s Times Square, the conference was greeted with a refreshingly surprising bit of news that the U.S. airports reopened to fully vaccinated international travelers, meaning a direct bridge to a full resurgence of international travel became available to the industry. Talk about a way to infuse some buzz into a conference!
The Marriott Marquis did an outstanding job of coordinating and managing the event, and provided top-notch service, food, beverages, and cleanliness the entire time. The attendees, all of which were required to be fully vaccinated due to NYC law, were treated to a fantastic program arranged by the NYU team.
OnSiteIQ’s Key Takeaways From the NYU Hospitality Investment Conference
As expected, much of the programming at the conference was based around what the hospitality industry can expect in 2022, and another year removed from the shutdown tied to the COVID-19 pandemic.
From this lens, OnSiteIQ identified three key takeaways from the conference that they believe will set a tone for 2022, and the projected boom of the hospitality construction industry.
- With vaccinated tourists being permitted to travel into the U.S., expect an eager amount of travelers to flood the U.S. hospitality industry in 2022.
- The demand for new products, especially around cleanliness, will open up opportunities for hospitality renovation and new construction.
- The demand for new features, in order to create a unique value to a hotel experience, will drive up renovations and new construction.
Ultimately, people want to travel again. After having been pent up for the better parts of two years, they want to travel, and they want to do it in style. Therefore, prepare for the arms race that major hotels will engage in as they try to build and rebuild their hotel to meet the evolving needs of a hungry audience base.
A Look Back on Earlier Projections
The projected fire sale of hotel assets due to the pandemic never materialized, as equity infusions, funding, and loan modifications stepped in instead.
For non-distressed assets, the consensus was that 2022 would most certainly be an active year, maybe even a banner year, for hotel transactions. Private equity funds looking at the hospitality sector currently have low return thresholds, which is positively affecting pricing, particularly in light of inflationary cost pressures on the pro forma.
Ultimately, international investor interest is high, as the United States is seen as an economically and politically stable country compared to the global alternatives. OnsiteIQ is primed for any brand or developer needing 360-photo and video documentation, and an schedule progress artificial-intelligence-supported platform to track their project’s performance in real time.
Another concern raised for investors is the increased wear and tear on the physical hotel asset related to the increase in leisure demand. Higher PIP (property improvement plans) and capital investments are likely coming, well beyond a typical reserve requirement, and should be factored into pricing decisions of buyers. This is another area that OnsiteIQ can assist with property assessments and can cover every square foot for brands and developers to review using 360-video and photo documentation.
With inflation growing by the day, buyers should also pay close attention to the potential cost for renovations, and the effects of labor and cost inflation on the bottom line. Accordingly, management companies will need to get increasingly creative when coming up with cost-saving solutions that can be implemented without a decline in the customer experience.
The industry has many challenges ahead, but it is evident based on the NYC Hospitality Investment Conference that we are among a group of exceptional leaders and talent that will overcome these challenges with hard work, collaboration, and innovation. It remains exciting to be part of this group of leading organizations helping the industry thrive.
Anthony Capuano, Marriott’s CEO, was joined by the CEOs of IHG Hotels & Resorts, Hilton, and BWH Hotel Group — the parent company of Best Western — at the NYU Hospitality Investment Conference. Each provided optimistic recovery forecasts for 2022.
Hilton CEO, Christopher Nassetta, indicated his company would eclipse 2019 performance levels next year. If such a return to normal happens, hotel development plans like CitizenM’s are possible. “Sharks never stop swimming because, if they stop swimming, they die. Developers develop,” Capuano said this week while commenting on an uptick in deal activity at his own company.
Another announcement this past week was with one of OnSiteIQ’s dear friends and clients, CitizenM. The Dutch hotel company, CitizenM, is dusting itself off from the pandemic with deeper pockets to go on a global growth spree. Their company leaders revealed this month they raised $1 billion off existing investors to expand the brand. GIC, Singapore’s sovereign wealth fund, as well as APG Asset Management and KRC Capital, a private equity firm founded by CitzenM founder Rattan Chadha, all contributed.
“It has not been business as usual, but the long-term strategy with our shareholders is unchanged,” CitizenM CEO Klaas van Lookeren Campagne said in an interview with Bloomberg, which first reported the capital raise. “We are patient. We have all gone through many crises in the past.”
What OnSiteIQ Has in Store for 2022
Again, our key takeaway from the NYC Hospitality Investment conference is there are direct relationships between the growing demand to travel, and the growing demand to travel in style. The sum of these two things will equal a construction boom in the hospitality industry.
So, if a developer or brand sees an opportunity to bring more efficiency and scalability into their new construction or renovations, give OnSiteIQ a try.
Our state-of-the-art 360 photo and video documentation technology places the power of the build back into the hands of the owner or developer. Gone are the days of OAC meetings that lack substance, and welcome to the days of knowing where your project stands at all times with OnSiteIQ.