State of the Industry in 2014

Hotel Business Design asked design professionals for their insight on the state of the industry and what lies ahead in this new year. From thoughts about new construction and renovation to the latest trends—both in business and design—our group of seven candidly shared their perspectives.

The experts are: James Carry, principal in charge, Wilson Associates; Olivier Chavy, CEO, Wilson Associates; Deborah Lloyd Forrest, president, ForrestPerkins; Francis X Dumont, VP, director of design, Leo A Daly (Las Vegas office); Patricia Miller, VP and corporate director of hospitality, Leo A Daly (Dallas office); Scott Rosenberg, principal, HVS Design; Janet Smith-Haltom, AIA, principal, Hnedak Bobo Group; and Paul Taylor, founding principal and president, Stonehill & Taylor Architects.

What are some of the highlights from 2013 and what are you seeing for 2014 (in terms of both business and designs)?

Carry: We have always strived for our projects to have a sense of place and have their own unique expression. That has not changed. I think the design industry will continue to see a rise in importance to create a sense of place in projects.

Chavy: There will be a stronger brand identity from the big operator. Turnkey design concepts will guide this trend in order to match the growth of those companies. The good thing is that new brands are emerging from the big players (Autograph by Marriott, W from Starwood, Andaz for Hyatt, etc.), which allows creativity to drive the guest experience. Additionally, technology plays a much larger role, and I see a trend whereby operators are looking at creative solutions or public spaces using media projection. This makes the spaces 100% flexible and not nailed down to one specific design element or style.

Lloyd Forrest: As far a design trends, I see a trend away from safe neutrals and toward bolder accents, large graphics and glamorous, luminous finishes. In terms of business, sadly, as the work goes up fees are stagnant or decreasing. Service and deliverables will suffer if this trend continues.

Dumont: The economy is definitely getting better and more projects are coming online in America. We also see a trend with clients asking more about sustainable design so that they can make their properties greener and also reduce operating expenses over the long term. The design trends are definitely more future-oriented, where clients want to be ahead of the curve when it comes to design thought.

Miller: For the most part, the design trends we saw in 2013 reflect the traveling public’s need and desire for more social interaction and connectivity. One trend is that lobbies are designed to encourage guests to linger longer in a social setting. The increased socialization in hotels demands a design with communal tables for large groups and more intimate spaces for those seeking one-on-one conversations. There is a focus on children via the creation of more entertainment areas.

In terms of business, 2013 saw: an increase in sales of hotels requiring product improvement plan (PIP) renovations; brand managers becoming more stringent in complying with brand standards on capital improvements; property owners completing previously deferred renovations; more brand conversions taking place; and accelerated project schedules.

As for 2014? We will be incorporating even more technology in design; LED lighting will often be integrated into the design; we’ll see use of synthetic fibers that look and feel natural; we’ll be using more custom-print wallcoverings and roller shades; we’ll see more use of porcelain tiles that resemble natural materials, such as wood, stone, etc.; and within the color spectrum, jewel tones will be popular.

Furthermore,  in terms of business, new brand design initiatives are being put into play. Hotels must renovate to compete. And we’re seeing a slight uptick in construction of new hotels.

Rosenberg: Full-service hotels are simplifying their service and F&B offerings, while select-service is adding to theirs. There is still a distinction between these, but the line in the sand between full- and select-service is becoming blurry. This is due to the initial cost of the facilities, the cost of extra staffing associated with full-service hotels, and the competition to get open and/or renovate faster. Concepts like the Made Market (DoubleTree) and Herb ‘n’ Kitchen (Hilton) allow the three-meal restaurants to double up as a market on-the-go and a restaurant. They also add visual interest, a variety of F&B offerings and excitement to these hotels.   

Smith-Haltom: One of the biggest trends we saw in 2013 that we also see continuing for 2014, is the adaptive reuse of historic buildings to become full- and limited-service hotels. You could say one ‘trend within the trend’ is that many of the projects we’re involved with are not necessarily conversions of historic properties into five-star landmark hotels but rather, a complete transformation of historic structures into mixed-use, residential and hospitality projects that take full advantage of their ideal, central location in the urban core of America’s downtowns. Because so many of these amazing historic properties are located right in the very heart of our cities, they become prime development opportunities for both boutique and branded hotel properties. Plus, with historic tax credits available and most cities offering additional incentives for redevelopment, it represents smart investment.

While some historic buildings saw conversions in the 1970s and ’80s into office space, much of that space has become vacant over the years with decreased demand in the commercial office market. Other structures we’re working with have sat vacant for decades—wrecked by neglect. But because these buildings offer unique character and are extremely well located, they present a highly viable investment opportunity for the right type of hotel developer.

The challenge for us as architects is to restore the properties to their original grandeur in an authentic but modern way. The challenge for hotel brands is to embrace these types of projects with flexibility toward their brand standards.

Taylor: The trend is toward smaller rooms; great bathrooms; reduced labor through select-service model; creative dining/bar component for the boutique product; conversions of office to hotel; and mixed-use hotel-residential condo.

How about your scope of work—new-build, renovations, conversions, mixed-use? What do you think this says about the industry, the economy?

Carry: In 2013, we saw mostly renovations and conversions inside the US. In Asia and the Middle East there is a large mixed-use project, as well as new-build construction. I think renovations will continue to lead the 2014 US market, but we’ll also start seeing more new-builds pop up. The economy is getting stronger and continuing to come back from the “R” word back in 2008.

Chavy: Most of the first-tier cities are seeing more mixed-used developments, especially in ‘new’ city centers. Large developers weigh in heavily on this. Definitely lots of new-build in Asia.

Lloyd Forrest: Renovations and new-builds will continue to increase in 2014 but should level out or decline slightly in 2015.

Dumont: We are seeing more new-builds than we have in the last six years. Renovations continue to be strong. Conversions are less common because there are so many vacant spaces of all types. With the still continuing glut of condominiums, we project less mixed-use involving new residential product. We see a continuing increase of new-builds for 2014. I believe this says that the economy is getting slowly better, with hi-rise residential lagging behind peak numbers we saw about seven years ago.

Miller: We’ve seen a mix of cosmetic renovations, new brand conversions and extensive property renovations to meet new brand initiatives, such as the more social lobby. Although new construction hotel projects are still limited, our team is working on a few new P3 developments and seeing more opportunities for private hotel development. We expect the industry will continue to grow modestly in 2014.

Rosenberg: 2013 has been a very busy year. The renovations and repositioning work continues to be hot. Many rebranding projects. As the economics of hospitality are coming back and competition for renovation construction has heated up, renovations are approaching the cost of new-builds. The new-build work is coming back and we are working on several new-builds right now.

Smith-Haltom: We are seeing an ever-increasing focus back to the urban core of our cities, which is very exciting. Cities have been offering incentives for redevelopment for years, but the hotel industry is embracing those opportunities at a much greater pace post-recession. More and more hotel brands see the advantages in broadening their reach through these unique properties, and are meeting the challenge to save as much of the past as possible in these historic structures, while creating a modern hotel to suit contemporary demands.

Taylor: Mixed use has become a large part of our work starting this year and going into 2014. In New York, the combination of residential units above hotels seems to be the highest in priority and best use of space in desirable locations. Many of these mixed-use projects that we’ve worked on have been new-build. This illustrates how the residential market has returned and how combining condos with the lifestyle hotel enhances both sectors.

What types of hotels are requiring your services? Full-service, limited-service, select-service? Where have you seen the most growth and where do you see it going forward?

Chavy: Future service will be selected services for the upscale market (rooms versus public spaces), and full-service for the mid-range market. I believe it will still be full-service projects in Asia as well, especially as guests in the region have a wealth of luxury hotels and resorts that outdo one another in terms of what they offer. Perception is also key as most guests expect the ‘full works’ for one price. 

Lloyd Forrest: Our company specializes in luxury and upper-upscale. Fortunately, these two segments are doing quite well in North America and internationally as well.

Dumont: We have seen the most growth in Tribal gaming facilities and other hotel enterprises. With the large gaming/hotel developers, we see a lag because of their over-leveraging of previous projects. We see the most growth in jurisdictions where gaming is a new market.

Miller: We focus on upper-upscale and upscale, full-service hotels, as well as upscale and midscale select-service properties. Currently, we are designing for new construction and renovation projects in all segments, as well as independent hotel properties. We expect that renovation opportunities will continue to be strong in the coming years.

Rosenberg: We are fortunate to have a clientele that allows us to work in full-service, limited-service, select-service and extended-stay. It seems that we are seeing a lot of activity in the resort, upscale, select-service, and extended-stay projects are making their move.

Smith-Haltom: We’re currently initiating projects in Texas, Oklahoma and in several Tennessee cities that encompass all of the elements of the adaptive re-use trend. Interestingly, some of the properties we’re working with now were originally designed between the turn of the century and the 1920s as hotels, later converted to office, and now are being returned to their original purpose as hotels. What is unique about this sort of project is the element of surprise you can create in the guest experience. We are working with projects where the exterior structure has retained its historic qualities, but the inside was ‘gutted’ in the ’70s. That presents the opportunity to create a compelling dichotomy between old and new in the design.

Other design elements that add character and interest to the guest experience are the original building features and structural systems that we play up in the design. As an example, a historic property we are looking at now with several hotel brands in Tennessee features heavy timber construction. This is a great opportunity to celebrate the structure as a signature design feature.

The projects we are looking at for 2014 include creating more luxurious and spacious guestrooms and bathrooms, restoring historic lobbies and other public spaces, and upgrading mechanical and electrical systems—all while making these buildings accessible for today’s guests. 


Taylor:  Select-service hotels are definitely the trend. Boutique properties are often select-service hotels but not necessarily branded as such. The labor savings in select-service hotels is enormous especially in union environments such as New York.

As far as renovations, have they been mostly cosmetic (a refresh) or full-scale redesigns? Has this changed in the recent past and where do you see most of your work going forward?

Chavy: Unfortunately, owners have the tendency to ‘shop around the corner’ for FF&E renovation. Larger-scale renovations might come earlier than seven years, as the quality of the interior design workmanship in the recent hotel construction in Asia has been very poor.

Lloyd Forrest: We are seeing both soft goods replacements and complete renovations or repositioning to address PIPs for a brand change.

Dumont: Renovations have been a full-scale redesign when it comes to hotel lobbies and public space. We have seen more cosmetic refreshment in the guestrooms. We see this trend continuing, but eventually guestrooms will have to evolve to match newer lifestyles.

Miller: Renovations have been a mix of cosmetic refresh, brand conversions and repositioning of properties based on the condition of the existing property, the client’s objectives and the needs of guests. We are seeing more hoteliers embrace the ‘soft brands’ or becoming independent boutique hotels in significant top-tier markets. We are completing a renovation—catering to a design-oriented clientele—to convert a branded property to an independent boutique hotel in a top-10 market. We are also working on a few hotel conversions to Marriott’s Autograph collection, each with a strong independent identity. Several property owners who have deferred renovations during the recession are looking for a refresh to get their property back up to the brand standard as well as incorporate technology trends to meet guests wants and needs.

While general design trends, new technology and active social environments will continue to be part of any renovation in the near term, we expect that our work will continue to be a mix of extensive property repositioning, rebranding and cosmetic refreshes that vary depending on the market and the requirements of the property owners and brands.

Rosenberg: In the past few years, renovations were more of a refresh, but there seems to be a focus on custom and full-scale redesign and new design work here now. A lot of this is due to neglect during the recession. We have seen properties that haven’t been renovated for over 10 years.

Smith-Haltom: Within these types of adaptive re-use hospitality projects, we are seeing full-scale redesigns because of the nature of the original property conditions. In Houston, one of our mixed-use projects with an extended-stay component features a striking grand lobby and elevator lobby with remnants of historic architectural details left intact. This gives the property a distinct era and influences our design much more so than a ground-up property with a blank slate from which to design. When we approach this type of historic property, we key-in on these original features—which contributes to very unique design challenges. Our role as designers is to celebrate that palette of materials in a way that complements its original era while bringing it into a modern context that is enticing to the building’s users and guests.  We can be playful with the vintage interiors while respecting the true character of the original era.

Taylor:  Almost all of our work is full-scale redesigns. The industry has picked up steam and we are most interested in involving ourselves in repositioning of properties.

Boutique vs. brand: Comment on your work in both areas and where you see the growth potential and why.

Carry: Wilson Associates has a larger branded hotel portfolio than a boutique portfolio. Boutique hotels are always fun to design, but branded hotels have easier access to capital and customers. However, whether we are designing a branded hotel or boutique hotel, we are able to meet the client’s needs and budget. It’s what we stand for: designing for the client. We don’t take pride in one specific style or niche; we focus on meeting the client’s needs and creating their vision into a reality.  

Chavy: There is an increasing market for guests who are looking for super luxury. Brands like the Aman, Alila and Ritz Carlton Reserve, Cheval Blanc, Baccarat are expanding rapidly. They recognize that there are a growing number of guests who are willing to spend and pay more to be in exotic locations and in small-scale properties.

Dumont: Boutiques are becoming more popular as people are seeking more intimate experiences in their hotel choice. Brands, while still holding to brand standards in amenities, are adding more personalized features to emulate the individualized atmosphere of a boutique.

Miller: Boutique hotels and branded hotels each have their place in the hotel market, and each will continue to learn and borrow ideas from the other.  From a design standpoint, guest experience is critical in each. The popularity of boutique hotels has brought an elevated design aesthetic to each of the major brands with refreshed design standards at all levels. Boutique/lifestyle hotels have borrowed ideas from the brands to create alliances for loyalty programs and quality standards. Branded hotels will continue to have the bulk of the market share, but all hotels will need to be renovated, and we expect growth in both areas. The boutique hotels we’ve been involved with are very experiential. Each is focused on providing a one-of-a-kind experience with a personal understanding of their guest.

Brands are reinventing themselves to cater to the changing lifestyle of the next generation of travelers. As part of a mixed-use development in downtown Omaha, we are designing a new Marriott hotel across from the Century Link Convention Center. This will be one of the first new-construction properties to realize Marriott’s new direction. We are working hand-in-hand with Marriott’s design team to understand the brand’s new design goals and objectives. The 350-room hotel will incorporate a social lobby with the latest technology designed to function as the guests’ living room. Guestrooms will be less traditional with a feel of open space influenced by high-end retail boutiques and guest feedback.

We expect an increase in renovations of existing hotel properties to implement each of the brands’ new direction across portfolios, as well as new construction to replace outdated properties that have not kept pace with new market trends.

Rosenberg:  Branded work remains strong and we are actively involved with our clients to work with the brands to help our clients make decisions that go a long way and help them stay away from the ideas that don’t make sense. From a design perspective, the select-service brands are careful to make sure their products are consistent in quality and can be identified as being part of the brand.  As you go more towards full- and luxury-service, or in urban markets, there becomes more design opportunities to exercise more custom design.

On the boutique side, these are independent-minded clients who are willing to take a chance and not use the reservations system and following that a brand gives them. For the investor, it is riskier to finance, and they really have to have a location and a concept that will gain traction in their target market. This means some added pressure on the design team to be unique. Then real success happens when you can somehow be unique or custom and still land on budget and on schedule.

In both cases, the guestroom has to be smart and efficient as many dollars are riding on the repeated decisions that are made in the guestrooms. Assuming the guestrooms have a good bed, Internet, and are well lit, it is the lobbies and F&B where there are the most opportunities to shine and leave the guest with a memory to make them come back.

Taylor:  Boutique hotels are, in the purest sense, independent hotels. In the major urban markets where internet-booked rooms dominate over flag reservation systems, the boutique hotel can thrive. The savings from brand-mandated labor and brand standards can be redeployed through quirky but trendy solutions that are attractive for the urban demographic. Our work is divided between both types. For larger projects, the branded hotel is more common due to the ability to finance a project with a respected brand. There are successful independent operators, however, that successfully break this rule.

How about the design of hotels? What is the focus in terms of space: Public (such as lobbies), dining venues, guestrooms?

Carry: One trend that will continue to grow in 2014 is the shrinking size of hotel lobbies as an effort to enhance the guest experience. Long gone are the massive entry spaces. Now, guests want to feel that one-to-one undivided attention the moment they walk in. It makes them feel important.

Chavy: Hotel lobby areas are also no longer designed with only the hotel guest in mind. Now, hotel public spaces can only be successful if locals/outsiders also embrace it. Spas are also dramatically shrinking. There is more emphasis on how guests perceive the public areas. Boundaries between each public space (lobby vs. lounge vs. F&B) are blurred to make every space generate revenue.

Lloyd Forrest: Lobbies and guestrooms are the main focus of renovations right now. There is a growing trend toward outsourcing the operations of hotel food and beverage outlets.

Dumont: We see lobbies becoming more of a place of gathering instead of just a space that people pass through. It’s definitely becoming more social—more connected. We see an interesting trend in dining venues where people still want great food and a great atmosphere, but they want it served more quickly and a little more casual. Even the affluent guest is short on time. Concerning the guestrooms, we see more of a focus on technology and also a growth on the percentage of space dedicated to bathrooms. Guests would prefer a smaller living space if they could get a more spa-like experience in their bathroom.

Miller: There will be a continued opening and blending of space, allowing for more socially interactive lobbies. These lobbies will become the guests’ living rooms. Technology will be available everywhere, allowing a plug-and-play environment. Communal rooms such as great rooms, lobbies and bars will offer easier access to technology and provide guests with a selection of environments tot support their needs. With active social spaces being an important part of hotels, the need for upgraded technology is imperative to meet guests’ needs.

Rosenberg: We see an interesting mix of developers. Some are F&B folks at heart, and they believe that the F&B can be an added value to the bottom line and attraction to their hotel (assuming they have a location to do that). Other hotel developers remain traditional and conservative in their thinking, where F&B is an amenity required due to the competition, but that F&B is not a source of supplemental income.

Ultimately, it the developer who has the open mind to know when to determine when F&B makes sense to push, and when it makes sense to suppress (assuming the neighborhood will handle that), or when there should be no effort in it at all other than the minimum requirements of the brand.  This should be a market driven decision.

We do see lobbies being customized, upscale of branded requirements, when the brands agree it is not compromising the brand.  This can be a great place to invest extra dollars per key.

For branded projects, where the guestrooms have basic conveniences (such as a great bed, Internet, good light, that are clean and secure), investing extra money into guestrooms to customize them seldom makes sense, unless the brand does not have a standard guestroom package or if it is boutique hotel.

Taylor: The heart of the hotel business is the guestroom, and downsizing of the guestroom is the new trend. The standard king of yesterday is the king junior suite of today. Better optimization of the guestroom space is key. For the hotel for business travelers, matching meeting space with room count remains part of the basic model. The boutique property often has an important public space and dining/bar component to bring energy, branding and lifestyle to the property.

What has been the biggest challenge in 2013? What do you anticipate to be the biggest moving forward?

Carry: Projects stop and start, causing scheduling and billing issues. However, the market is strong and we are seeing a steady increase of work, which is always a good sign.

Lloyd Forrest: The challenge has been that as volume of RFPs have increased, firms are bidding low fees, which is counterintuitive and ultimately damaging for the industry since deliverables and service will eventually have to be adjusted to align with the fees. 

Dumont: The biggest challenge has been the continuing trend of reduced design fees, which was a result of the recession. As workload increases, the design trade has to learn how to produce more at a lower cost.

Miller: Owners’ design schedules continue to compress. We want to keep the quality of design, documentation, and level of service high, and that is challenging within the shortened schedules. It requires creative problem-solving and discussions with clients about goals and priorities.

Rosenberg: Time! Time is always our enemy. We need more of it and can’t figure out a way to increase the clock to 30 hours in a day!

Taylor: The biggest challenge has been to balance our staffing with the project schedules and we see this continuing into 2014.

What about volume of projects; is there more on the books than in 2013?

Carry: The outlook is strong for 2014. Wilson Associates has so many exciting projects on the horizon. I’ve recently seen a trend rise in the luxury transportation sector of hospitality. Wilson Associates is currently a finalist to design the QE2 Ocean Liner.

Lloyd Forrest: I think 2014 will see an increase from 2013, then level off in 2015.

Dumont: Yes, there are more projects in the design phase. What we find, though, is that clients are still reluctant to move as quickly as they did pre-recession. This means that the time allotted to client decision-making has increased.

Rosenberg: 2013 was improvement on 2012, and 2014 looks even more promising.  We remain cautiously optimistic, as we don’t want to over staff yet balance it so that the current staff is not over worked.

How about domestic vs. international work? What are you seeing?

Carry: For us, the international market is still where most of our work lies. Although we are seeing a rise in domestic work, Asia is still leading the market.

Lloyd Forrest: We are seeing both, but with more work in the U.S., international work is less compelling at this time.

Dumont: We are seeing an increase in domestic design work. What has happened in the last few years is that even smaller firms in the U.S. have pursued international work. Therefore, international design work has become more competitive, not just with large firms seeking work in foreign countries.

Miller: We are working on domestic and international projects in the Middle East. Since the domestic market has been improving, we’ve been focusing our efforts here at home as well.

Rosenberg: Both. Domestic work continues to be steady.  But there are also lots of opportunities for international projects. 

Taylor: We are interested in international work but have not begun this. We have been very busy with our U.S.-based clients and haven’t made the outreach yet.

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