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DON’T GET MIXED UP WITH MIXED USE
•Benefits & challenges of a hotel in mixed use development•Case study of hotel campaign within mixed use development•Showcase of hotel performance within mixed use development
GROWTH ATTRACTIONS OF HOTELS IN MIXED-USE
•Unused bulk to develop hotel•Prime location & ample parking •24/7 security, safe environment•Variety of restaurants & bars •Funding easier in mixed-use•Hotel becomes “biz hub” •Easy access to shopping mall •Ideal for limited service hotel•Inexpensive infrastructure
LEGAL AND DEAL STRUCTURES ARE KEY
•Ownership considerations•Liability considerations•Insurance considerations•Management considerations•Operational standards•Need of body corporate •Estate management functions•Sharing of utility costs
OWNERSHIP OF HOTEL
•Smart mixed use owners develop and own hotel•Locate potential buyers once hotel is stabilized •Cash-in on full value created
INGREDIENTS NEEDED FOR SUCCESSFUL HOTEL IN MIXED-USE DEVELOPMENT
•No fixed formula•Each market is unique •Understand your market •Do marketing feasibility study •Difference in urban & suburban markets
SUCCESS RECIPE OF MIXED USE HOTEL DEVELOPMENT
Create touch stones such as:•Lifestyle & integration•Life-Work-Play environment •Art, design, fashion elements•Street café, deli, wine bar•Rev/PAR premium of 50% >
MISCONCEPTIONS OF OWNERS WHEN ADDING A HOTEL
•Need to contract international hotel brand•Don’t worry, hotel brand will provide ALL technical services •Hotel Brand will EVEN add equity•Handover Hotel Development to 3rd party – we DON’T know Hotels
MORE MISCONCEPTIONS….
•Hotels are different, but MY current team can handle it•We should have a Hotel in ALL of our mixed use developments•Hotels are just like OTHER anchor tenants
MARKETING & BRANDING CAMPAIGN CASE STUDY: GATEWAY HOTEL & THEATRE OF SHOPPING, DURBAN
•3* hotel 146 rooms, conf. for 350•9 hotels with >1300 rooms in node •180,000sqm mall & 10,000 car parks•1.3m visitors per month•70 restaurants & bars •25 movie houses•Wave House: Entertainment - Sport - Lifestyle venue
SHOW CASE OF HOTEL PERFOMANCE IN MIXED USE: MANDELA RHODES PLACE HOTEL & SPA - CAPE TOWN
•19,000sqm development, 300 car parks•4*Hotel - 179 apartments, conf. for 80•85 apartments in rental pool wit 7% ROI •2500sqm of office & retail facilities •4 restaurants and bars•Stay - relax - network - taste - explore
CONCLUSION
•Hotel/retail combos are powerful•To marry hotel & retail elements has benefits & dangers •Owners often don’t know what they don’t know about hotels•Understand culture differences between hotels and shopping malls•Hire experienced hotel & retail teams
