The hospitality industry is one of the most solvent and fluctuating industries. On a daily basis, this industry deals with transient customers. According to the real estate investor and developer, Adam Hochfelder, this type of the business climate in the hotel industry provides numerous lucrative reasons for investing in hotel properties.
Here, Hochfelder gives the key variables you need to take into account when planning your investment.
According to the type of services they provide, there are four main types of hotels:
The "full-service" offers everything a guest might want, including restaurants and bars, conference halls, fully equipped spas, and leisure and sports centers.
The "limited-service" is a step-down and offers almost as much as a "full-service". This is typically a restaurant, a fitness center, conference rooms, and a swimming pool. This type of hotel property gives the opportunity to run more predictable operation.
The budget type of hotels characterizes with some basic amenities and services. Typically, it provides a laundry service and a cafeteria. As the name indicates, these type of hotels has low rates.
The "extended stay" provides amenities and features which can be found in your home. These type of hotels is aimed to cater specific demographic of people in need of a temporary home.
Hochfelder stressed out that there are some unique metrics for tracking the growth and progress viable under the specific circumstances: Average Daily Rates (ADR) and Revenue per Available Room (Rev Par). These metrics can be used to track your standing in the industry against similar businesses in your market area.
Tourists and business travelers are the main key demographics which drive the demand for hotel rooms.
However, depending on the location there can be also other drivers such as special events, attractions, colleges, etc.
In an article for Patch, Adam Hochfelder indicates that tourists tend to drive demand throughout high seasons and weekends and business travelers from Sunday through Thursday.
To take full advantage of the demand of each demographic, you can use your unique location and on-site services and amenities.
Due to the rise of technology and the necessity to establish a business that can serve the demographics of the digital natives, the modern age has seen a substantial shift in how hotels are developed.
There is an increased rise of the millennial hotels in order to cater to the needs of the demographics, from travelers to business entrepreneurs.
So, having in mind these tips given by Hochfelder, you can have an easier time taking that crucial first step towards a successful future.
Here, Hochfelder gives the key variables you need to take into account when planning your investment.
Overview of Asset Classes
According to the type of services they provide, there are four main types of hotels:
- full-service
- limited-service
- budget hotels
- extended stay
The "full-service" offers everything a guest might want, including restaurants and bars, conference halls, fully equipped spas, and leisure and sports centers.
The "limited-service" is a step-down and offers almost as much as a "full-service". This is typically a restaurant, a fitness center, conference rooms, and a swimming pool. This type of hotel property gives the opportunity to run more predictable operation.
The budget type of hotels characterizes with some basic amenities and services. Typically, it provides a laundry service and a cafeteria. As the name indicates, these type of hotels has low rates.
The "extended stay" provides amenities and features which can be found in your home. These type of hotels is aimed to cater specific demographic of people in need of a temporary home.
Tracking Performance and Growth with Metrics
Hochfelder stressed out that there are some unique metrics for tracking the growth and progress viable under the specific circumstances: Average Daily Rates (ADR) and Revenue per Available Room (Rev Par). These metrics can be used to track your standing in the industry against similar businesses in your market area.
Capitalizing on Hotel Demand
Tourists and business travelers are the main key demographics which drive the demand for hotel rooms.
However, depending on the location there can be also other drivers such as special events, attractions, colleges, etc.
In an article for Patch, Adam Hochfelder indicates that tourists tend to drive demand throughout high seasons and weekends and business travelers from Sunday through Thursday.
To take full advantage of the demand of each demographic, you can use your unique location and on-site services and amenities.
Optimizing Your Operations per Customer Profile
Due to the rise of technology and the necessity to establish a business that can serve the demographics of the digital natives, the modern age has seen a substantial shift in how hotels are developed.
There is an increased rise of the millennial hotels in order to cater to the needs of the demographics, from travelers to business entrepreneurs.
In order to appeal to the modern guest profile, these hotels are characterized by their stellar, urban locations, innovative interior designs, open spaces, and vibrant room designs.
If you want to target the rising demographic profiles, Hochfelder suggests adapting your services to fully meet their demands.
The benefits of investing in hotel property are numerous. They can range from increased and diversified returns to the rising number of hotel investment firms offering support, information, and resources to new investors.
As more and more people around the world are traveling thee demand for hotel accommodation is high. Consequently, Hochfelder indicates that investing in hotel properties is becoming one of the most prominent business opportunities in the hospitality industry.
If you want to target the rising demographic profiles, Hochfelder suggests adapting your services to fully meet their demands.
Benefits of Investing in Hotel Properties
The benefits of investing in hotel property are numerous. They can range from increased and diversified returns to the rising number of hotel investment firms offering support, information, and resources to new investors.
As more and more people around the world are traveling thee demand for hotel accommodation is high. Consequently, Hochfelder indicates that investing in hotel properties is becoming one of the most prominent business opportunities in the hospitality industry.
So, having in mind these tips given by Hochfelder, you can have an easier time taking that crucial first step towards a successful future.
If you are interested in more detailed information about this topic, connect with Adam Hochfelder on Linkedin.
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