By Nicholas Leider
SOUTHERN HOSPITALITY
As the hotel and travel industries are continuing to recover amid COVID-19 , Georgia offers an interesting peek at primary and secondary hospitality markets .
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One simple way to judge stability in commercial real estate is to look at the length of relationships . Office leases , for example , can extend years and decades into the future . Hotels , meanwhile , rely on relationships that are short term — guests can stay for a weekend or more , but the volume of turnover is an inherent aspect of the business . Appropriately ,
the instability related to COVID-19 was especially turbulent from the onset . But now more than two years into the pandemic , hospitality is recovering across all property types and markets .
Helen Zaver , senior vice president with Colliers International and a member of its National Hospitality Group , spoke with Commercial Investment Real Estate to detail expectations in the hospitality market . Based in Atlanta , she details how business and convention activity may continue to increase , which can mean different experiences for major urban markets versus secondary vacation destinations , such as Augusta , Ga ., and Savannah , Ga .
CIRE : COLLIERS PRODUCED SOME RECENT RESEARCH THAT SHOWS THE HOSPITAL- ITY SECTOR IS CONTINUING A STEADY RECOVERY FROM COVID-19 . HOW CAN CRE PROFESSIONALS GAUGE THE HEALTH OF THE SECTOR ?
HELEN ZAVER : The pent-up demand has caused upward pressure on pricing for hotel rooms . We ’ ve seen markets that are in destination leisure locations have the largest upticks . The urban downtown markets have been a little slower to recover , especially in high-tech corporate locations . But overall , we ’ ve seen a positive trend , especially since 2020 . We ’ re getting close to , if not already , surpassing 2019 .
In Georgia , things are a bit skewed . The markets around Atlanta have been able to recover significantly and are probably surpassing 2019 numbers . Savannah has been a key market , given it ’ s a destination . It can be a bit of a tale of two locations — the areas that rely on convention center and group corporate business compared to leisure travel . That corporate activity has yet to come back in a big way .
I think that many of the travelers who were on the road prior to COVID-19 have returned . We ’ re seeing a lag , really , in group travel for corporate activities . I think that ’ s where we ’ ll see activity resume in the next year or two . Areas that may take longer or never come back are where IT companies that have said it ’ s fine to work from home — and that might be a permanent change that hospitality will have to work with .
CIRE : ATLANTA IS OBVIOUSLY A MAJOR MARKET . YOU ALREADY MENTIONED SAVANNAH , BUT AUGUSTA IS ANOTHER SMALL VACATION MARKET . WHAT CAN THOSE LOCATIONS TELL US ABOUT THE HOSPITALITY SECTOR IN GENERAL ?
ZAVER : Savannah has had a higher occupancy in 2021 than pre-pandemic years . Tourism has been phenomenal . We ’ ve seen transactions that have been record highs . Augusta has had a similarly good return . The Masters , the golf tournament that takes place every April , accounts for about 25 or 30 percent of hotel business each year . The 2020 year , when the Masters was held later in the year without spectators , was an aberration . That market has come back in a big way already , just like Savannah .
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