HUNTER CONFERENCE
Mitch Patel, founder & CEO of Vision Hospitality Group, moderated the panel and implored hotel brands to implement e-tipping and stricter cancellation policies.
and that’ s where we are,” he said.
“ The ask is still remembering those lowinterest-rate days,” Webster added.“ Buyers are asking the ask to change their thinking.”
Friedman’ s advice for investors is to be proactive because, in this environment, it’ s taking longer to transact.“ Banks have pulled
back on commercial real estate,” he said.
BUILD DOWN Travel is a fluid business. Real estate, the steel and brick and mortar, is not. New hotel development has tracked similarly with hotel transactions: It’ s muted. "“ Demand is transitory; supply is structural,” Webster said, noting that supply growth is well off its historical levels of around 2 % per annum.“ It doesn’ t make sense to build today,” especially in the upper end of the market, which is supply restrained because the math doesn’ t add up. The math, he said: For every $ 100,000 a key in a new hotel, you have to get to $ 10,000 per year by year three of operating income per room to make it work at today’ s borrowing costs.
Added Friedman,“ It’ s hard to develop in any market,” which is why some owners might be better off keeping what they have, as Webster noted.“ Owning an asset where there is supply constraint leads to a run up in net asset value,” said.
And though building new hotels is a challenge in today’ s environment, Hunter opined that hotels longer in the tooth might need to step aside for new ones.“ The life of a box is 30 years,” he said.“ Don’ t fool yourself that a hotel that is 30 years old has value.”
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8 hotelsmag. com May / June 2025