JLL has released an investor's guide to lifestyle hotels, a fast-growing category. Plus, other highlights from this week's news in hotel deals and development worldwide.
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What’s a “lifestyle” hotel? It’s a property run by a major chain that evokes a boutique feel. It may have eye-catching decor, such as local artwork. It almost always includes better-than-average food-and-beverage service — often with a cocktail bar or coffee bar.
JLL’s predictions about the segment are worth noting: The investment advisory firm has helped trade $83 billion in hotel assets worldwide in the past five years.
Today, lifestyle hotels account for 32.4% of open U.S. branded hotels, an increase of 26.3 percentage points of share since 2000, according to JLL’s report. The firm forecasts that the market share of branded lifestyle hotels will speed up thanks to growing demand.
More than 10,000 lifestyle hotel rooms have opened in the U.S. since 2000. That’s a lot of growth since W Hotels opened in 1998 and arguably became the first major “lifestyle” brand. (W Hotels were the creation of impresario Barry Sternlicht and Starwood Hotels and Resorts.)
The trend is spreading across the globe. By 2025, lifestyle hotels are expected to make up 23% of the hotel development pipeline worldwide, according to STR.
Over the past decade, lifestyle hotel average daily rates achieved a $33.60 premium over non-lifestyle hotel average daily rates, STR reported.
In the past five years, the compound annual growth rate of revenue per available room at lifestyle hotels has exceeded that of all other branded hotels by 50 basis points.
For more details, read JLL’s “An investor’s guide to lifestyle hotels.”
Other Top Hotel News
Michelin Guide to Start Rating Hotels in 2024
- Michelin Guide, whose star ratings are coveted by restaurants worldwide, said on Thursday it would begin designating “the most exceptional hotels.”
- Like with the restaurant rankings, Michelin intends to create a stir by revealing its list of hotels at a ceremony in the first half of 2024.
- Unlike its restaurant ratings, Michelin will award its favorites “keys” instead of stars. Michelin will judge hotels by criteria including local character, design, decor, and amenities — among other factors.
Puerto Vallarta Will Get an All-Inclusive by Marriott Bonvoy
- Black Creek Mexico said Alojica has wrapped up the acquisition of the Marriott Puerto Vallarta Resort & Spa from an affiliate of Marriott International.
- The 433-room resort, located in Puerto Vallarta, Jalisco, Mexico, will be renovated and converted into an All-Inclusive by Marriott Bonvoy.
- Marriott plans to grow its portfolio of all-inclusive resorts from 30 to over 100 by 2025.
Canada Notches Record High Average Room Rates
- Average room rates reached record highs across Canada in May, June, and July, according to The Globe and Mail.
- Canada’s average daily rate hit $232 (Canadian) in July, a 29% increase compared with the pre-pandemic July 2019 rate, CoStar’s STR said.
- In Vancouver, July hotel room average rates soared to $346 (Canadian), the highest monthly rate ever recorded by a Canadian city. The city’s cruise business is a key driver.
- According to a recent economic analysis from Destination Vancouver, Metro Vancouver needs 20,000 new hotel rooms by 2050 to keep pace with demand.
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Photo credit: A guest room at W Hotels' property in Budapest, Hungary, which opened in 2023. Source: Marriott.