The long-term success of a commercial development comes down to the developer’s ability to attract stable, long-term tenants. Finding the right combination of businesses can create a lively destination that attracts both locals and visitors alike.
In the right market and location, a hotel is a tenant with proven ‘staying power’, due to the sound investment fundamentals. Putting a hotel in your development can offer several benefits.
A hotel often has a symbiotic relationship with other businesses in your development. Surrounding businesses benefit from the influx of consumers. Hotel visitors will be inclined to use nearby services, such as food, gas, and other necessities.
Also, the type of hotel can impact the activity in the development. Economy or mid-sized hotels may not have a restaurant, which can support your food and beverage tenants. On the other hand, hotels that do have restaurants and lounges can bring new traffic to your development from locals and tourists alike.
Putting a hotel in a larger mixed-use development also benefits businesses like shopping malls, casinos and other establishments where guests may wish to plan an overnight stay. Naturally, a hotel also opens up options for business travelers.
As towns and cities expand, developers are seeking an opportunity to establish an early foothold. These areas often have fewer amenities, giving developers the opportunity to be first-in-market with a hotel offering. A new hotel can also breathe fresh life into areas in the process of revitalization. In both instances, a hotel can serve as an anchor in high-potential, underserved markets.
Developers benefit when they are in strong communities. Hotels have a positive impact on the greater community at large. They support tourism (whether as a tourist destination or a stopover visit). They allow communities to host invitational hockey tournaments, reunions, and other events. They facilitate business travel, which supports local businesses. They create jobs. They unlock opportunities to improve the community and its infrastructure. They can become a source of pride. For developers, it’s a win-win.
Finally, hotels can set your development apart from the rest, making it a beacon and a destination.
A hotel isn’t for every development. To understand the full economic impact of a hotel, it is important that you conduct a market feasibility study to determine if your location is a viable site for a hotel (a hotel brand will typically conduct its own research). It is also vital to choose a hotel partner with a soundtrack record. An expertly run, attractive, and well-placed hotel helps a development thrive, improves the lives of all those who live nearby, and brings profit well into the future.
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