In a real estate cycle , not long ago , boutique hotel operators emerged to satisfy unmet guest needs for a non-commoditized guest experience . It was also an opportunity to convert and adapt aging properties . We saw boutique hotel operators develop , with Kimpton and Joie de Vivre leading the way . Their growth potential attracted institutional capital and ultimately made them M & A targets for the major brand families . Today , we are witnessing the next iteration of this phenomenon , with new lodging concepts delivering truly unique experiences :
All the comforts and service of a luxury , five-star hotel in the great outdoors , check . Realworld farm-to-table cuisine , check .
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Trading out that traditional hotel room for a camper or tent set against a breathtaking backdrop , check .
A like-minded membership community with an expansive network of lodging options , coworking spaces , fitness facilities and other activity offerings , check .
The possibilities are as endless as the imaginations of their creators . Such creative , emerging brands in the experiential lodging space include AutoCamp , Under Canvas , Collective Retreats , Gravity Haus and Trailborn .
The pandemic fueled much of the growth in the experiential lodging segment , as the promise of unique outdoor accommodations and experiences appealed to unwillingly isolated travelers . The desire for high-quality ,
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lifestyle-lodging experiences has only grown since .
PROOF OF CONCEPT As a way to test out their concepts , founders will build out and operate their first property , typically capitalized by the founders ’ friends and family circles . Subsequent properties are also commonly funded in this manner , but , not surprisingly , that well can run dry quickly . In this first stage , founders are laying the foundation : refining the concept and operating principles , training staff and understanding the customer base . The ultimate goal is to shape the building blocks that will be core to building a durable company and brand .
Next , there is the formal capital phase of brand growth in which founders are now seeking
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to acquire and reposition properties within their concept . In order to do this , founders may seek a single , deeppocketed joint venture ( JV ) programmatic equity partner or leverage multiple relationships for a larger syndication . This JV partner is typically a private equity fund , a family office or a high-net-worth investor . Such thematic investors have leaned into the new entity ’ s investment thesis and understand the hospitality niche , identified guest profile and associated demand drivers and potential revenue streams . With the capital commitment on hand , founders can review acquisition opportunities quickly and act swiftly .
CRITICAL MASS AND EXIT STRATEGIES Whether it is building ground
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46 hotelsmag . com July / August 2024 |