The hotel sector shakes off its post-Covid blues

Over the past year, luxury and resort projects have been key drivers for AEC firms’ work within the hotel sector.

The Southeast, Southwest, and California are among the markets where firms report their strongest demand for projects that target both business and leisure travelers. Their clients’ priorities are focused on creating high-quality experiences for their guests, with an eye toward brand awareness and ROI growth.

“Hotel brands are reinvesting in their flagship properties,” notes Bob Lopez, Project Executive for the general contractor Swinerton. Brand elevation is among the factors that Lopez says are “critical” to securing long-term event contracts and attracting “high-value” clientele.

Hotel developers are looking to partner with “problem solvers” that can deliver projects on time and within budget, says Jeff Gouveia, President of Suffolk, which through its history has managed more than 100 hotel projects totaling 25 billion sf.

Lately, Suffolk has seen its steadiest demand in Florida and California, especially as coastal destinations have become increasingly popular with tourists. In Florida, its projects vary from family destinations like Great Wolf Lodge in Naples, to urban hotels like Tampa EDITION. Gaming projects are also a bright spot.

In California, Suffolk oversaw construction of Regent Santa Monica Beach, the luxury brand’s first flagship hotel in the U.S.; the Moxy + AC Hotel in Los Angeles; and the 766,000-sf, $268 million Chicken Ranch Casino Resort in Jamestown.

DLR Group has fielded “significant” demand for hotels in such areas as university and college communities, mixed-use districts, sports/lifestyle centers, and outdoor destinations. Ed Wilms, DLR’s Global Hospitality Leader and Senior Principal, adds that the Southeast has been “very active” in this sector, as have specific markets in Colorado, Utah, Cleveland, Chicago, and Kansas City.

However, some AEC firms caution that the hotel sector isn’t always smooth sailing. While the design engineering firm IMEG is experiencing a “fair amount” of proposal activity, design period schedules are not always predictable, with delays in starting or extended pauses between phases. Bob Winter, PE, IMEG’s Director of Hospitality, says these delays are typically the result of project financing or construction cost budgeting issues.

Bill Wilhelm, President of R.D. Olson Construction, says that while his firm’s pipeline for hotel projects is “robust,” many of its clients have been acting with caution due to uncertainties about labor costs and tariffs on materials.

A mix of new builds and renos

Demand for hotel projects is typically a combination of new construction, renovation, and adaptive reuse. Olson, for example, recently completed construction on AC Hotel Pasadena, and expects to finalize construction on Appellation Healdsburg later this summer. It recently broke ground on an expansion of Lido House in Newport Beach, and anticipates three more groundbreakings this year.

Much of DLR Group’s recent work in this sector, says Wilms, has consisted of major new builds either starting or resuming after being on pause the past several years. Winter says IMEG’s “significant wins” so far this year have been a mix of new construction and major renovation work. IMEG also tapped into the adaptive reuse market with recent projects like the $60 million conversion of a former YMCA in St. Louis into Museum 21C, a 10-story, 200,000-ft boutique hotel.

Swinerton led the transformation of the 137-year-old Hotel Del Coronado in San Diego that focused on historic restoration and modern upgrades. Lopez says this project included the interior demolition of the hotel’s Victorian Building and the reconfiguration of 337 guestrooms into 404. The hotel’s Garden Courtyard was also rebuilt, with its fountain and bronze statue restored.

Last February, Chicago-based developer and construction manager Keystone Group, working with a design team made up of OVAS Design, Ratio Architects, and Circle Design, completed construction of InterContinental Hotel Indianapolis, a $121 million transformation of that city’s century-old Illinois Building into a 170-key luxury hotel. The 12-story hotel includes Indianapolis’ only Penthouse Suite.

Engendering personalized experiences

Getting their hotels open to the public as quickly as possible is every developer’s priority. Consequently, first-cost considerations often determine which priorities will be implemented. “Owners want to see comparisons between HVAC system options to ensure the best value and guest experience,” says IMEG’s Winter.

The AEC firms interviewed are either exploring or implementing prefabrication in their hotel projects as cost-saving measures. Gouveia of Suffolk says that prefab is common for pools and saunas, exterior panels and walls, and bathrooms. However, the adoption of modular building techniques remains limited in this sector. “It’s something that’s discussed but not often used,” says Wilms of DLR Group.  Gensler, though, has designed hotels with modular guestrooms. A 99-key three-story modular hotel at Point Place Casino in Bridgeport, N.Y., went up in about two weeks.

Presenting travelers with personalized experiences they will remember is another client priority. Tom Ito and Lori Mukoyama, Global Hospitality Leaders at Gensler, elaborate that clients’ priorities extend to design impact and efficient operations. Key themes include:

• reflecting local culture and context with emphasis on storytelling via design
• health, wellness, and spirituality
• brand partnerships
• future proofing, such as multifunctional spaces
• sustainability and ESG goals, that Gensler sees moving to the forefront of priorities
• revenue-generating spaces.

DLR Group’s Wilms adds that clients want their hotels to convey a “personality” that delivers a local experience for guests which is supported by rooftop lounges, crafted food and beverage options, and wellness amenities. 

A temporary home

Wilms says guests seek out hotels that provide access to adjacent mixed-use programming that includes entertainment, retail, and authentic chef-driven food and beverage. Wilms notes that more hotels are appealing to guests’ wellness needs. Social clubs that offer exclusivity are “very popular” right now, particularly in boutique and independent establishments.  Also popular are hotel properties centered around outdoor activities, particularly in historic mountain towns, tourist destinations, and near lakes.

At Lido House, Olson recently broke ground on five private cottages (which will double their number on site) that provide guests with a heightened level of respite. The cottages are up to 1,500 sf each, and include rooftop terraces and fireplaces, exterior lounges with ocean views, indoor sunrooms, and fully equipped kitchens.

“A hotel is a temporary home away from home,” observes Ambar Margarida, IIDA, WELL AP, LEED Green Associate, a Principal with the architectural design firm Spacesmith. As such, she sees a hotel setting as an opportunity for retailers to meet customers where they are. Spacesmith just completed work with the multinational jeweler Graff on its 3,300-sf location within Fountainbleu Las Vegas, the largest Graff boutique in North America. The location opened in May.

Other amenities that AEC firms say clients ask to include in their hotels are rooftop bars, fitness centers, on-site dining, reliable internet, quieter HVAC systems, and smart technology that gives guests greater control over their environment while staying. “Great bathrooms, natural light, and spacious layouts, while not traditionally labeled as amenities, have a substantial impact on guest satisfaction and repeat business,” say Gensler’s Ito and Mukoyama.

Squeezing out better operational performmance

Hotels are known to be notorious energy and water hogs. But more developers are turning to their design and building teams to help them reduce their hotel’s consumption.

Based on its clients’ goals, IMEG provides optimal design for all hotel projects, says Winter. These initiatives include energy recovery ventilators, demand control ventilation that shuts off delivery when the room is unoccupied, guestroom management systems, solar systems for water heating, PV systems with battery storage, cooling and irrigation systems that deploy greywater, and heat pumps. IMEG also does energy modeling services during the design phase to provide feedback for the owner and architect on MEP systems.

Gensler incorporates into its hotel designs high-performance building envelopes, passive design strategies, xeriscaping, greywater systems, and efficient plumbing fixtures. The firm also advises its hotel clients about achieving LEED, WELL, and Fitwel certifications.

These and other measures, says Swinerton’s Lopez, not only reduce operational costs and environmental impact, “but also help hotel owners appeal to eco-conscious travelers, an increasingly important market segment.”

EDITOR'S NOTE
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