State of the Industry: Cincinnati Edition
Thought leaders from all sides of the region’s hospitality industry talk shop on what makes secondary markets hotbeds for hotel development.
Like a lot of secondary cities around the U.S., Cincinnati has gone from fly-over country status to being a big blip on the hotel development radar. Additions to the city’s core in recent years include a 21c Museum Hotel in a converted apartment building, a dual-branded Hampton Inn & Suites/Homewood Suites in a former newspaper tower and a new-build Holiday Inn Hotel & Suites. And slated to debut there soon is the AC Hotel Cincinnati at The Banks. The city’s suburban hotel stable has also seen some growth—including the recently opened 120-room Hyatt Place Cincinnati/Sharonville Convention Center—as have its just-across-the-Ohio River counterparts in Northern Kentucky, such as Newport (whose new Hampton Inn & Suites is shown below) and Covington (that city’s Hotel Covington was featured in the April 2017 edition of Boutique Design).
The Hampton Inn & Suites in Newport, Kentucky, near Cincinnati.
So, why are these once-overlookable destinations so hot, and what could dampen the enthusiasm for non-gateway urban assets? Boutique Design brought together leading voices from the area’s hospitality ownership/operations, design, architecture and manufacturing sectors to share their insights on the opportunities and challenges presented by Cincinnati and other mid-sized markets, along with several related—and timely—topics.
The event was held at the downtown Cincinnati headquarters of CR architecture + design, and was moderated by Boutique Design executive editor Mary Scoviak. Here are some takeaways from that no-holds-barred discussion:
First Class Opportunities
People and businesses are relocating to smaller markets. The cost of living, especially housing, is more affordable, as is commercial real estate. Also appealing are the slower-paced lifestyle and ease of access to cultural/civic resources. While the prime opportunities for adaptive reuse and conversions have been snapped up already, in many markets developers willing to get creative in terms of finding/concepting challenging buildings will still have a chance to make their mark. And, with lower real estate costs, there are also options for new-builds that can make the numbers work.
The biggest wins are still likely to be first-in-line lifestyle hotels. Daniel Fay, chairman and founder of Commonwealth Hotels LLC, pointed out that was a principal driver behind the ART, a hotel in downtown Denver that his firm manages. Fay said the key is custom-tailoring the concept to the character and tastes of the specific market. In his view, even a strong performer such as the ART won’t be scalable.
AC Hotel Cincinnati at The Banks
CR director Kelly Gaddes said it’s important for design firms to engage local branding companies to help them utilize authentic references that drill down well beneath the typical tourist touchpoints. In a similar vein, Architects Plus partner Matt Erdman noted that the design of hotels is “becoming micro-local, telling the story of the specific block they’re on.”
For all their potential, the participants agreed there are drawbacks to working in such markets, most notably a shallow labor pool. “A city the size of Cincinnati may have three good plumbers who specialize in hotel development, and they’re always booked,” said Bimal Patel, president of Rolling Hills Hospitality. In addition, FRCH Design Worldwide senior vice president and principal Jim Stapleton noted that as secondary cities get a denser hotel base, developers may no longer be able to rely as readily on tax credits and other assistance from local governments to make a proposed project financially viable.
No Hard Stop to the Current Growth
The previously mentioned tighter labor market is a concern in virtually all markets, the participants said. Other worries include the growing presence of so-called living-wage requirements, rising interest rates and a supply/demand imbalance in some cities. Despite all that, the consensus was that the current boom is unlikely to come to what Patel described as a “hard stop.” Instead, a gradual slowdown is more likely “notwithstanding some unforeseen major event,” said Fay. Participants also agreed that when the cycle does slow, that’s likely to translate into more soft-goods renovations that reflect tightening budgets.
Participants in the State of the Industry session were (left to right): Bimal Patel, Rolling Hills Hospitality; Tedd Swormstedt, Boutique Design parent company ST Media Group Intl.; David Arends, CR architecture + design; Jeff Eagle, Winegardner & Hammons Hotel Group; Jim Stapleton, FRCH Design Worldwide; Kelly Gaddes, CR architecture + design; Michelle Finn, ST Media Group/Hospitality Media Group LLC; Matt Erdman, Architects Plus; Michelle Wildenhaus, Studio Twist; Matthew Hall and Mary Scoviak, Boutique Design; Daniel Fay, Commonwealth Hotels LLC; Oriana Lerner, Boutique Design; Jayne Menke, Artonomy Inc./Miller Gallery; Scott Rickles and Melani Beattie, Boutique Design; Declan McCormack, CR architecture + design; and Christina Green, Boutique Design.
The Latest Looks in Guest Room Design
Studio Twist founder Michelle Wildenhaus said she’s seeing a move away from “an all-white landscape in every guest room” to environments that incorporate multiple textures and colors. Jayne Menke, president of Artonomy Inc./Miller Gallery, seconded that, noting that designers are expanding the art programs in hotels to include all kinds of media, not just prints, and also are looking at new kinds of substrates to expand the visual/graphic offering. “Designers now want hotel art that will stand out, not blend in,” Menke said.
CR’s Gaddes emphasized that quality, rather than quantity, is key to impactful art installations. “One outstanding and relevant piece of art per room can have more impact than two or three mediocre ones, and with no impact on the budget,” she explained.
Space Trends Within Hotels
Architects Plus’ Erdman said lobbies are getting bigger, in response to consumers’ growing demand for socializing/working/dining space in hotels, while guest rooms are shrinking. But Fay thinks the latter trend can be a turnoff to guests. “It’s a mistake to shrink the room footprint,” he said, explaining that while a smaller room might be fine for younger travelers or where real estate is at such a premium that nothing else would be financially workable, “Guests like to have space in their rooms. They want to feel comfortable and they also want to feel they’re getting value for their money.”
FRCH’s Stapleton noted that any hotel built to a very specific brand footprint with unusually small or uniquely laid-out spaces may be hard to convert to another brand in the future. “And because this type of property usually involves custom millwork and built-in casegoods, they’re also expensive to renovate,” Stapleton explained.
But a smaller footprint for another type of venue—the meeting room—can be a boon to boutique hotels, as long as they are inviting, light-filled spaces, says Jeff Eagle, vice president of construction at Winegardner & Hammons Hotel Group. “Boutique properties typically can’t compete with large hotels and their larger ballrooms for major functions,” Eagle said, but there are a lot of training sessions and other small meetings that niche competitors can accommodate.
He adds that meeting planners typically want a room with windows and other amenities that make time spent in the space as pleasant as possible. Several participants agreed with that sentiment, noting that hotels that currently have these spaces in either basements or windowless interior rooms should move them elsewhere.
When it comes to hoteliers they like to work with, Marriott Intl. won widespread praise from participants, especially for its fast-growing MOXY and AC Hotels flags, while Hilton’s mid-tier and select-service brands, including Hampton Inn & Suites, drew plaudits. In addition, Hyatt netted kudos from several participants as a company on the upswing, thanks to such brands as Hyatt Place and Hyatt Centric. Hyatt fans include Fay, who sits on that hotelier’s ownership council. “They listen, and they want to do things right,” he said. However, several participants noted that hoteliers experiencing ongoing changes in their c-suites, such as InterContinental Hotels Group (IHG), have left some question marks for owners and franchisees.
Summing Up Statement
A local truism (often attributed to Mark Twain) holds that if you want to avoid the end of the world, go to Cincinnati, as everything happens there 10 years later than anywhere else. But that’s definitely not the case with the city’s hotel market, participants said. Summed up Winegardner & Hammons’ Eagle: “Cincinnati is a microcosm for what’s happening in the rest of the country.”