OK, I admit the mind sometimes wanders during hotel investment conferences, even ones I'm (supposedly) helping put on. It happened last week at our Midwest Lodging Investors Summit, during our urban, suburban and interstate market report sessions.
I began to ponder in which market I'd like to open a hotel (hey, at least I was daydreaming about something work related). After writing a summary of those sessions yesterday (now featured on our website), I begin to think about the same question.
Let's say you had $100 million to invest in a hotel (don't ask where we're getting the money, that would mean the dream has ended), where and what would you develop? One 400-room upper-upscale full-service center-city hotel, or maybe a couple upscale select-service hotels in a growing suburb outside that big city? Or would you take that and invest in multiple and less expensive economy and limited-service hotels in interstate markets surrounding the suburb?
I love visiting and exploring new cities, so the urban option sounds exciting. I also love road trips, and enjoy finding a great hotel alongside the big highway or even one a couple miles off the beaten path (would that make it a rural or small-town market then?).
But I think I'd go suburban, despite the potential oversupply still being worked out, and the slower recovery. Call me a contrarian. I'd look to some of my past experiences from IHG's extended stay owners certification programs and develop a couple extended-stay hotels. I like the unique operating model, the heavy reliance on statistics, and as a consumer, I like the value of staying in one. I'd consider upscale, midscale and economy flags, from any of the brand companies. I like the more hands-on operating and sales side of extended-stay hotels, and I think a strong suburban location would give the right owner and operator a chance to connect with a community.
I'm probably not that person, though. I do realize a lot more goes into these decisions. I have just enough knowledge to be dangerous, to myself and whatever market I landed in. So it's probably best if I leave the real developing to you. Which market looks the best?