Dive Brief:
- As the U.S. lodging industry reaches maturation, hotel brands and owners will need to expand services for existing customers or attract new customers in order to generate higher same-store sales, according to a recent analysis from CBRE. That’s because it will be increasingly difficult to generate return on investment through unit growth.
- The authors of the analysis expect hospitality players to partner with residential real estate companies to create living options like student housing, co-living, senior communities and vacation homes.
- Taken together, recent societal shifts — like remote work, rising housing costs, delayed family formation and the prioritization of sustainability goals — make the integration of coworking and residential assets into hotel brands a smart move, according to the report. Some companies, like Accor, have already implemented this into their strategy.
Dive Insight:
Hotel brands have been known to form alliances with credit card companies, car rentals, airlines, short-term rental management companies, spas and cruise lines as a way to expand branded loyalty programs and increase market share. But these strategic alliances only go so far, according to CBRE: While they may help increase the dollars spent in hotels, they won’t necessarily create new customers.
Implementing residential lodging, however, could attract new customers beyond the traditional business and leisure travelers as well as enhance business diversification.
A company like Marriott, the report gives as an example, could “capture a large share of future guests’ wallets” by offering housing for each stage of life: student housing, corporate housing and retirement housing that would extend “brand loyalty into the later stages of life.”
This comprehensive strategy would also allow hotel brands to engage with guests outside of the traditional peak travel ages — early 30s to late 50s — as well as during shoulder periods.
According to CBRE, several hospitality companies such as Accor, Hyatt and Marriott, have already started down this path. The report cites hospitality-branded residential developments like the Storyliving by Disney community and the Margaritaville and Canyon Ranch senior living properties, plus Selina’s coliving program, as examples.
Hyatt Hotels Corporation also recently launched a short-term vacation rental platform called Homes & Hideaways by World of Hyatt, which features a collection of private home rentals in leisure destinations across the U.S.
