By Tasha Anderson for Arizona Builder’s Exchange
Opportunity was the main takeaway at this month’s AZBEX Leading Market Series. More than 50 attendees gathered at the DoubleTree by Hilton in Tempe on Thursday, August 3, for an update into the hospitality market and walked away with a positive outlook on things to come.
Rachel Kettenhofen, VP of operations for AZBEX, began the presentation by giving attendees a brief overview of the state of the hospitality market as of the end of 2017, using information taken from the AZBEX Database.
“The hospitality sector accounts for 5.83 percent of the total construction market, or $594M, in 2017,” said Kettenhofen. She went on to highlight the top owners in the hospitality market, with the two largest being Five Star Development (21 percent sector project ownership), and Danrick Builders (16 percent).
Kettenhofen also noted 12 percent of hospitality projects have not yet selected an architect, while 42 percent haven’t selected a general contractor.
Where are We and What are the Trends?
After the brief glance at the state of the market, panelists Ryan Wall, director, franchise sales and development for Radisson Hotels; Taylor Jacobs, director of acquisitions and development for NewcrestImage; and Patrick Johnson, member/manager with Danrick Builders; as well as moderator Matt Kosednar, Partner with Allen + Philp Partners, Architects & Interiors, began the panel discussion with a look into where the industry is now and some of the trends they are seeing.
Overall, the panelists agreed the outlook for the industry as a whole was positive for the foreseeable future.
“It was just announced this past July that we’ve had 100 straight months of RevPar growth,” Wall said, explaining the steady growth in the blend between occupancy and rate. “(The projections) are seeing continued growth. It’s not going to be the big swing upticks that we saw maybe a few years ago, but still positive growth, which I think is positive for the industry overall. And it’s going to continue to fuel a lot of development and opportunities that you’re seeing around town, internationally as well.”
When asked about noticeable trends in hospitality, both Wall and Jacobs were very enthusiastic about the rise of modular construction and agreed that, though the cost is higher, the delivery time is shorter and that there is a chance to cut down the construction cost as coordination between developers, architects and others improves.
“We’ve got a lot of developers right now that are looking at modular construction and the general sentiment is it saves you time and not cost, so that’s kind of the motivator right now – being able to deliver quicker – but I think there’s opportunity for the cost savings to come down the line as this starts to get rolled out and become a standard,” said Wall.
The Opportunities
Toward the end of the panel discussion, a few big project updates were made, as well as some hints at new projects coming in the near future.
One of the biggest announcements came from Patrick Johnson with Danrick Builders, who said the Lucid Motors Factory, the new proposed electric car manufacturing facility in Casa Grande, has been financed and is moving forward.
Johnson also announced PhoenixMart has “paid off all their liens and their property taxes and is now moving forward.”
Taylor Jacobs with NewcrestImage updated attendees on the AC Hotel at Arizona Center, noting, “We’re in development and hopefully by the end of this year will be under construction.” Jacobs also alluded to looking into Tempe and downtown Phoenix again for four or five more projects in the future but did not go into detail.
Ryan Wall with Radisson Hotels didn’t give specific project details but did hint that there would be new development in the near future due to a relaunch of their brand.
“Locally, we’ve got a lot of whitespace to fill and that’s what I find exciting about it, because it gives us the opportunity, now that we relaunched, to go and find main-to-main locations for the experience going forward. There’s tremendous growth opportunity with a number of our brands. We’re having some really positive conversations at the moment that, hopefully, I’ll be able to speak more concretely about some of the new projects here in the coming months,” Wall said.
The next Leading Market Series will discuss public spaces. To check out dates and topics or to register for the next event, visit: http://lms.azbex.com/