Hospitality Design - July 2023 - 49

Operated by White Lodging, the Canopy by
Hilton San Antonio Riverwalk is a collaboration
between Gensler, Lake Flato, and MARKZEFF
Domingo restaurant in the Canopy by Hilton San Antonio
Riverwalk used limestone and wooden beams from the original
19th-century structure to create a double-height wall and ceiling
Green hues define Japanese restaurant
Kappo in the Kimpton Bamboo Grove
Suzhou by SHUISHI and SCDA Interiors
Topside, the rooftop restaurant in the
Hotel Revival Baltimore, developed
by NuovoRE and crafted by SLDesign
get money is strained. " You have to have a great
balance sheet, " says Reardon, " but even with
that, rates are not what they were a few years ago.
Inflation has taken its toll. "
Places like Austin, Nashville, and Aspen,
however, " are bulletproof, " says Everett. " If you
have the capacity to do something, there is ROI
there, but it's as challenging now as it has been in
my career. " JLL Hotels & Hospitality Americas
CEO Kevin Davis also sees several deals in
Nashville and Austin, as well as in high-barrierto-entry
markets in Southern California and
Miami. " These are the best markets with strong
sponsors, and it's still tough, " he says.
Development has slowed, but continues
Private equity historically has been the biggest
buyer of hospitality, but those firms are leveraged
buyers; they need financing. If the cost of the debt
is more than the income of the property, they will
move on. " That's one of the reasons acquisition
activity has slowed, " says Davis. " We've seen a
pick up in investors who have their own money.
They're not a five-year buyer like private equity.
They may hold onto an asset for 10 to 15 years and
can handle the higher interest rates knowing it
may go down in the next few years. "
While there might be a hotel with great
operating performance and strong cash flow,
the owner still has to pay almost 9 percent to
finance the hotel. " That's the reality of what the
Fed is doing to reduce inflation and slow down
the economy, " Davis continues. The good news
is developers are going to develop. " If it's a good
project, we can help them raise the debt, " he adds.
Durability and adaptability are key
The challenge today is longevity and durability.
" Part of it is capital intensive, " says Everett. " We
have to see those investments pay off over time.
We want to see a five-, seven-, or 10-year life out of
everything we do. "
" We own the Hilton Hawaiian Village
Waikiki Beach Resort in Honolulu, which runs
97 to 98 percent occupancy every day of the year.
Durability is going to be a focus for that project, "
says Brenda Rauch, vice president of renovation,
design, and construction for Park Hotels and
Resorts. " We [need to] make sure we are keeping
up as much as we can for the guest experience. "
Since the pandemic, designers have learned
to be nimble. " We have to look at design from
the point of view of adaptability and creating
spaces that work for our current behavior, " says
Gonzalo Bustamante, executive vice president
of design and development at MGM Resorts
International.
Collaboration breeds success
While the industry bounces back, it's now facing
other issues, including getting projects over the
finish line. " Suppliers and subcontractors need to
become more efficient in their processes because
our schedules seem to be getting tighter, " says
Jorgensen. Because there are limited resources,
" there's never enough time, " adds Rauch. In
response to these fluctuating timelines, it's all
about creating a team atmosphere that invites
people to think outside the box. " The basis of our
success has been collaborating with high-quality
people who have a high level of experience and
professionalism, " says Reardon. hd
hospitalitydesign.com July 2023
049
Photos by ERIC LAIGNEL, LYISO STUDIO, and courtesy of NUOVORE
http://www.hospitalitydesign.com
Hospitality Design - July 2023

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