2023 Hunter Hotel Conference on Hospitality & Tourism – Cost Increases, High Demand, & Lender Relationships
The 34th Hunter Hotel Conference held its annual conference from March 21-23 at the Atlanta Marriott Marquis Hotel. This three-day event brought together over 2,000 international leaders from the hospitality sector to network, share insights and predictions on trends in the field and present future developments. With a robust offering of panels and presentations, the conference explored the financial state of the hospitality industry and the latest business developments to combat potential development obstacles.
Here is an overview of the key takeaways from this year's conference.
Costs Continue to Rise at a Moderate Rate
The impact of setbacks from COVID-19 is still present in the industry, specifically with construction costs. Various factors still weigh heavily on costs, including supply chain constraints, labor availability, land costs, FF&E delays, and tougher lending environments. Although project costs are up about 25% compared to pre-pandemic levels, experts have suggested that the rising rate is at a moderate pace. AEC professionals must find ways to implement smart strategies to anticipate and combat these increased costs; these can include creative material ordering for multiple projects to enjoy economies of scale, dedicating adequate time to planning and budgeting to help projects remain on track and avoid cost overruns and strategic partnerships with vendors and suppliers that can deliver a win-win for both parties.
Hospitality as a Positive Force for Society
The hospitality industry is still in high demand and positively affects communities. It is anticipated that GDP could slow, and hotel demand could grow as the industry normalizes and returns to operating as it did in the pre-pandemic landscape. The hospitality market is extremely fruitful because it builds communities. Economic prosperity is a long-term benefit of hotels in local communities because employment opportunities arise when hotels are built and sustained. Moreover, hotels are the catalyst for elevating business and success for small municipalities. When a hotel is built in a small town, tourism increases, which helps small businesses flourish. Therefore, while the demand for hotels still varies in the current economic climate, there is no doubt that the overall impact of the hospitality industry is a lucrative and positive one.
Invest in Relationship Building with Lenders
Securing investments and loans for new development is more difficult now than in previous years, given the current state of the market and increased cost of capital. It is imperative to implement smart development strategies and outline budgets in great detail to better position the project to secure investment. There is a greater emphasis on the need to be detail-oriented and professional when asking a lender to finance a construction loan; they want a clear picture that the project will be a success and that there will be a sound return on investment. By connecting with the lender and being prepared to answer any questions they have about the owner, development plans, and use of budget, projects will increase the likelihood of securing financing.
Although COVID-19 placed pressure on the hospitality industry, adjusting to the market's new demands is crucial as we transition into the post-pandemic landscape. Connecting with professionals in the industry and sharing experiences and strategies helps ensure future success. Creative and collaborative partnerships come out of events like the Hunter Hotel Conference, and we are certainly glad to have attended this event.
We hope to see you at next year's conference on March 19-21, 2024! Please visit the Hunter Hotel Conference website over the coming months to register for the conference.
Thank you for being a part of our hospitality journey! Visit our website or call us at (407) 629-0595 to learn more about FK Architecture's hospitality services.