With construction largely halted, investors focus on improving existing hotels
With construction largely halted, investors focus on improving existing hotels
Adaptive reuse of office and historical buildings lends opportunity for new value
Hotel owners and operators are turning to renovations and repositionings of existing assets due to the tough development environment for new-build properties. (Getty Images)
https://www.costar.com/article/90494646/with-construction-largely-halted-investors-focus-on-improving-existing-hotels
PHOENIX — Getting a new-build hotel project across the finish line has been a difficult proposition in recent years, so owners and operators are turning to renovations and repositionings.
According to CoStar data, new supply growth across the United States is at 0.7% year to date, well below the long-term average of 1.6%. High financing costs and labor shortages aren't helping the short-term outlook for new development, so supply growth is expected to be muted for the next few years.
Panelists speaking during a breakout session at The Lodging Conference discussed strategies to boost the value of existing properties to continue to drive revenues.
Eric Jacobs, chief global growth officer at Aimbridge Hospitality, said the quantity of soft brands being launched by the big brands are breathing more life into assets that would typically be on the way out.
"You'll continue to see what you and I might see as obsolescent or good-to-teardown [get] extended life," he said.
For any project, the goal is to find the value in an asset to drive revenues and stay on top of costs, Jacobs said.
When it comes to activating a space within a property, he said food and beverage has stood out as an important piece for hoteliers. All the trends are pointing toward guests being willing to spend more on experiences with their travel, so providing an option for them to do it on-property is key.
"We all have great rooms, but the experience we create, that's where the value of the proposition is," he said. "Bringing new public space to life, places where you can get people to spend more money, keep them in the hotel — consumers seem to want to have that experience."
Neil Flavin, chief operating officer at HVS Asset Management & Advisory, said there are opportunities to upgrade an asset in a well-performing market. He said HVS is working on an asset right now that should see a $35 boost in average daily rate once it is complete.
"Running the numbers on converting some of these assets or upgrading some of these assets — in the right location — can definitely have a strong [return on investment] for you," he said.
Adaptive reuse of office buildings and old historical buildings, particularly in urban markets, is another creative opportunity to add something new to a portfolio, Jacobs said. Office buildings are trading at close to an all-time low, and these buildings provide long-term hotel opportunities in larger markets.
He said the adaptive reuse of historical buildings has "always been a great play ... the buildings that were built 50, 70, 100 years ago have character that is hard to replicate today in this development cycle and the cost of development."
Flavin said HVS looks for alternative-use opportunities in older hotels that are much larger than hotels built today. This can mean splitting the hotel into two separate brands or using half of it for a non-hotel use, such as student housing or retail.
"If you are in a more major metropolitan area with a facility like that, retail brings people," he said.
Rob Smith, CEO and president of Stonebridge Companies, said his company has been working on "a lot" of projects with mixed-use residential. This allows the owners to collect some cash upfront and then reinvest it into the accompanying retail and food-and-beverage spaces.
"It's a good way for either reuse or new builds to upstart the capital in front," he said.
Owners and brands are at a bit of a crossroads when it comes to capital expenditure requirements. Brands are pushing to ensure the assets in their portfolios are staying in tip-top shape, while owners are keen on letting things play out instead of pouring more money into an investment that isn't likely to pay off for several years.
Jacobs said the industry is "getting very, very long in the tooth" and a lot of hotels need improvements. But on the ownership side, it's difficult to put $3 million to $5 million in CapEx into a property knowing they'd have to hold onto it for another three to five years for the return on investment.
The trickle-down effect of having an older property starts to seep into the operations of the property.
HVS Asset Management & Advisory's Neil Flavin and Intrinsic Hotel Capital's Mark Gordon speak during a breakout session at The Lodging Conference in Phoenix. (Trevor Simpson)
"It's a challenge to get great talent to go want to work [at an older property] when there's a brand-new [property] over there. ... Getting talent sometimes to go to those hotels when they see an owner who's not willing to invest and recapitalize the asset — there's a challenge there," he said. "People want to work and be proud of what they do ... if the owner doesn't care, why should the staff?"
Brands are starting to be more stringent when it comes to CapEx requirements, Flavin said. It's imperative to get the timing right on a renovation, because it won't be easy to regain demand once it's gone.
"What happens all too often, and is very unfortunate, is that the owner waits too long. Business begins to erode. ADR begins to erode. The product begins to erode," he said. "Once that business goes away and it's gone to your competition, it's a lot more difficult to get it back."
While brands are starting to be tougher on owners to improve their properties, Smith said he's found their stance to be fair and flexible. As long as a property is delivering results and maintaining its guest satisfaction score, the brand will be softer in its demands for property improvement plans.
"I've ran properties that were in very bad shape and had happy customers. I've seen properties that are newly renovated that don't run well at all," he said. "It really starts with us owning the operation and then planning out the PIPs smartly."
Taylor Swift Lyric Sends Interest in Italian Town Soaring
Stefano Politi Markovina/Shutterstock
https://www.fodors.com/world/europe/italy/experiences/news/taylor-swift-lyric-sparks-271-surge-in-portofino-travel
“That view of Portofino was on my mind when you called me at the Plaza Athénée.”
Internet searches for the Italian town of Portofino soared by 271% within days of the release of the Taylor Swift album The Life of a Showgirl.
In the song “Elizabeth Taylor,” Swift opens with the lyric, “That view of Portofino was on my mind when you called me at the Plaza Athénée.”
Booking.com noted the increase in searches on their site for travel from U.S. locations to Portofino spiking between October 3 and October 6 compared to the same dates in 2024, coinciding with the release of the album. Portofino is a small fishing village on the Ligurian coast in northern Italy, near Genoa, that was a resort for the jet-set in the 1960s after entering Hollywood consciousness in the 1954 romantic drama The Barefoot Contessa, starring Humphrey Bogart and Ava Gardner.
The mention of Portofino in a song entitled “Elizabeth Taylor” is more than just hyperbole—Portofino was where Richard Burton reportedly proposed to Elizabeth Taylor in 1964. He had just finished filming Night of the Iguana in Puerto Vallarta, where Taylor had accompanied him to ensure his fidelity (although they were both still married to other people at the time). The couple later lived in the Hôtel Plaza Athénée in Paris, and the hotel remained a favorite of Taylor’s for the rest of her life.
Belmond Splendido Mare, a boutique luxury hotel located right in the diminutive piazza of the town, was a bit more circumspect, with no mention of the lyric on their Instagram feed, although the hotel does offer one of the most direct views of Portofino, along with it’s hillside sister property Belmond Hotel Splendido.
Luxury hotels notwithstanding, Portofino has grappled with overtourism in recent years, with boats carrying cruise ship shore excursionists and other day trippers into the small piazza to burn a few leisure hours in the middle of the day.
Although perhaps not quite as picturesque, travelers wanting to peep into Portofino to soak in the aura of Swift’s lyric can take a few side quests, to nearby Santa Margherita to hunt out the best café for gelato (they’re innumerable in the town center), or check out the sleepy waterfront focaccerias in the fishing village of Camogli, just on the other side of the peninsula from Portofino.
The Ligurian coast is noted for its cuisine, in particular, focaccia, an olive oil-infused flatbread, pesto, and farinata, cake made from chickpea flour and olive oil. Cooking in the region is typified by fresh herbs from the surrounding mountains, and a mix of fresh seafood, game, and, of course, freshly made trofie or trenette pasta.
Another popular tourist spot in Liguria is Cinque Terre National Park and Marine Protected Area, where local officials are putting restrictions in place to help ease overtourism, including a ticketed entry and monitoring of visitors for adequate footwear for hiking on the region’s narrow, steep trails.
Outrage Erupts as Airline Calls Women Flight Attendants ‘Air Aunties’
Hananeko_Studio/Shutterstock
https://www.fodors.com/news/news/outrage-erupts-as-airline-calls-women-flight-attendants-air-aunties
Spring Airlines drew criticism in China after advertising for “air aunties,” a term seen as sexist and ageist.
In China, a low-cost carrier is facing backlash after it advertised flight attendant roles as “air aunties.”
Spring Airlines, the country’s first budget airline, said in late October that it was seeking female flight attendants between 25 and 40 years old, preferably those who are married or have children. The airline plans to hire between 30 and 60 women with a bachelor’s degree, a height between 162 and 174 centimeters (5-foot-3-inches to 5-foot-7-inches), and experience in hospitality. The roles are based in Shanghai and Lanzhou and come as the airline looks to expand its services.
So far, so good? The problem arose when a recruiter described the applicants as “air aunties” who would bring more empathy and life experience and better care for elderly passengers and children.
The reference to “aunties” did not go over well in China. Social media users criticized the wording, which many saw as referring to older women. In many parts of Asia, the term “aunty” refers not just to relatives but to older women in general—and is often viewed as a sexist or ageist put-down. The Hong Kong–based South China Morning Post reported that one user wrote on Chinese social media, “The word auntie carries a heavy family tone. It makes people think of traditional housewives taking care of husbands and kids.”
However, the airline responded that it meant no offense. A representative explained, “We wanted to distinguish them from unmarried applicants. Their duties, pay and career paths are the same as any other flight attendant.”
It also said the term “air aunties” originally referred to women textile workers who were hired by airlines in the 1990s after being laid off. Spring Airlines employs 88 “air aunties,” most of whom now hold management roles. The airline also offers discounted training fees for older applicants. One “air aunty” interviewed said they have an advantage over new graduates. “We have worked before, raised kids and cared for elders. We also naturally take on the big-sister role in the team.”
It’s unclear whether the airline also hires older male attendants.
Bad Reputation
Spring Airlines isn’t the only carrier to face public criticism.
Airlines around the world are earning bad reputations for upcharging customers, cramming seats, and overselling lounges. Canadian low-cost airline WestJet drew outrage when it introduced an UltraBasic fare with no frills—not even a carry-on. Irish budget carrier Ryanair, another frequent offender, was criticized for charging $62 for a bottle earlier this year.
Major U.S. airlines are also struggling with public image problems.
Much to travelers’ frustration, Southwest Airlines recently rolled back several perks, including free bags and open seating. It also updated its refund policy for extra seats, affecting plus-size passengers, and restricted lithium-ion batteries, which impacts wheelchair users. Airlines have long been accused of damaging wheelchairs; the Department of Transportation fined American Airlines $50 million last year for its treatment of passengers with disabilities.
Meanwhile, United Airlines and American Airlines are both facing multiple lawsuits. Earlier this year, United was sued by former employees, while passengers filed cases against American Airlines alleging discrimination and misconduct.
With shrinking seats, vanishing perks, and less rewarding points, travelers are questioning airline loyalty programs and how much their status really matters in 2025. Following aviation news also reveals that U.S. airlines lobbied against Biden-era passenger protections—and that the Trump administration ultimately dropped compensation requirements this year.
We Actually Have Some Good News About an Airline
Jake-Hough/Unsplash
https://www.fodors.com/news/news/american-airlines-removes-bag-sizers-from-gates-to-improve-boarding-experience
Buh-bye bag sizers.
Finally, some good news from aviation: American Airlines will no longer ask passengers to fit their bags into a metal bag sizer moments before boarding. In a move that may be a relief for travelers, American Airlines has removed bag sizers from gates and is advising gate agents to use their judgment to determine if a bag meets requirements. The sizers remain at check-in counters, so passengers and staff can still confirm whether a bag is too large. Staff members are being encouraged to side with customers in close cases.
The absence of bag sizers is not an invitation to bring bigger bags. The airline said, “Team members will continue to monitor carry-on baggage in the lobby and at the gate, and oversized items will still be required to be checked in ahead of the flight.” The website specifies that the personal item should fit under the seat in front (45 x 35 x 20 cm), and the carry-on must fit in the overhead bin or in front of the passenger (56 x 36 x 23 cm).
The airline said this change will improve the customer experience, but it is not unique. United eliminated bag sizers in 2020 to enhance travel for everyone. The airline began relying on gate agents and handlers to monitor baggage, and a spokesperson told SF Gate that it was good news for both travelers and employees: “We’re always looking for ways to simplify the boarding process, and this move delivers a more seamless travel experience for everyone.”
Last year, American Airlines introduced more changes to its boarding process. New technology now allows passengers to board according to their zone and alerts staff members if someone tries to board early. Passengers with premium seats board first.
Baggage Problems
It is every traveler’s nightmare to be told at the gate that a bag is too big. Bag sizers appeared in airports in 2014, and airlines have since tried to get passengers to comply with their restrictions. These sizers have caused frustration among passengers and led to confrontations with staff worldwide. One major issue is that not all airlines have the same size restrictions, which confuses travelers.
Airlines profit significantly from baggage fees, and it’s no secret that agents who intercept the most bags are rewarded with bonuses. Ryanair is notorious for this. In July, a woman was seen sobbing at an airport in Bulgaria after Ryanair staff told her that her bag was too large. The airline allows one free bag up to 40 x 30 x 20 cm, while cabin and checked baggage must be purchased. The airline pays its baggage agents €2.50 ($2.92) for each bag they catch, and CEO Michael O’Leary insists that complying with the rules helps speed up boarding.
The problem remains: airlines have different baggage policies—regarding both dimensions and weight—creating a pain point for travelers switching planes both domestically and internationally.
DUHC&S | Strategic Hospitality Consulting & Advisory
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