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Resorts, Hotels Increasingly Must Provide Broader Experiences

Hotel and resort developers must adjust to a world where there is no longer a “one site fits all” destination for family vacations and retirement living.

Increasingly, those families consist of multiple generations — baby boomers, Gen-Xers and Gen-Y “millennials” — all with very different ideas for what makes a great place to visit or buy a second home. Throw in the rising challenges posed by web- and app-enabled home-sharing services, led by companies such as Airbnb, and the need to respond becomes more pressing.

“Everybody is having to improve their game,” said Leighton Collis, CEO of Boston-based development consulting firm Bespoke House, among several panelists at a recent national hotel and resort development conference in Carlsbad.

The conference was presented at Omni La Costa Resort & Spa by the Washington, D.C.-based Urban Land Institute, which has a San Diego/Tijuana chapter.

Experts said operators of hotels and resorts — including those that also sell on-site timeshares and other types of retirement and vacation homes — must increasingly offer year-round recreational options and other activities tied to a nearby city or town. And those properties must be well-equipped with Wi-Fi and other broadband infrastructure to handle the web and mobile-device requirements of leisure and business travelers.

Staying Connected

Isolated “silo” types of destinations favored by earlier generations — the cabin in the woods or home on a golf course — are less popular among younger travelers and the current crop of retirees and other empty-nesters. Millennials in particular want flexibility and variability in their travel itineraries.

Chris Fair

Chris Fair, president of Resonance Consultancy Ltd. in Vancouver, B.C., said hospitality operators are increasingly having to “mash together” offerings that cater to customers’ desires to learn new skills, indulge in new hobbies and sample the local culture while on vacation. Travelers and retirees increasingly want to be in urban or urban-adjacent settings where they can experience that mix of recreation and intellectual stimulation, rather than just kicking back and doing nothing.

Infrastructure

Even though different generations in a family may have their own interests, experts said the accommodations still need large common areas where those family members can gather to share what they’ve experienced earlier in the day.

Collis said one result of those customer shifts is that many properties are having to convert spaces, such as golf clubhouses, that are taking up significant real estate at resorts while going underused for much of the year.

Panelists said resort operators increasingly need to have year-round offerings, with season-specific properties falling out of favor unless they can extend programs beyond those that appeal to aficionados of sports like skiing and fishing. Rather than just maintain rooms and on-site meeting facilities, operators are being called on to curate activities where visitors will mingle with other businesses in the nearby city or town.

To that end, the look and function of the traditional hotel concierge desk is changing. Cate Thero, executive vice president of sales and marketing for Replay Destinations in San Diego, said the “bank teller” configuration now used by many properties is gradually being replaced by one that more resembles an Apple retail store.

In that type of setting, visitors might mingle with hotel employees along with other local community experts and business operators. They could discuss local festivals or events, sample locally made goods and otherwise get a “hands-on look” at the overall destination, Thero said.

Building Characters

Adjusting to shifting consumer needs may also mean changes in hiring practices, aimed at giving travelers a more authentic local experience. Gary Derck, CEO of Purgatory Resort in Denver, envisions operators more frequently hiring or forming alliances with individuals whom he described as “characters.”

These are primarily local residents — for instance, skilled cowboys, store operators, chefs and other artisans — with an obvious passion and enthusiasm for their hobby or line of work.

Such characters might not be slick communicators who recite a hotel corporate spiel, but can be valuable in encouraging repeat visits and creating an authentic experience unique to the destination.

“To get characters, you may have to pay a little more,” Derck said.

Derck said operators of vacation and retirement resorts may also need to account for “toy storage,” which impacts how their property gets put to use. In some regions, there are segments of travelers increasingly looking for amenity-filled places to park their RVs and ATVs, sometimes with several members of a family or group bringing those along on a vacation.

Gadi Kaufmann, managing director and CEO of Robert Charles Lesser & Co. (RCLCO), a real estate financial services provider in Washington, D.C., said a bigger-picture concern is appealing to the changing life-cycle needs of consumers as they age into retirement. As their children leave the nest, but also return for visits, those consumers may require on-site health care services, along with amenities and programs geared toward staying mentally and physically active — but which also must engage their visitors.

Even with the days of near-zero-percent interest rates apparently numbered, experts said there are still multiple opportunities to get hotel and resort projects financed, including numerous Asian and European investors with parked money to put into play.

Kyle Jeffers, managing director with Acore Capital in Santa Monica, noted that as long as there are no significant jolts to the national or global economy, prospects for new U.S. hotel purchases and developments — by domestic and overseas investors — should remain generally strong well into the coming year.

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