Finding the Right Markets for New Hotels
Before a new hotel can be built, it is vital to find the right location in which to build it.
Selecting a site for a new hotel involves several factors, such as making sure an area has the proper zoning for hotels. Just because a certain city has few existing hotels does not mean it will be the best place for a new build--ideally, a new hotel should be located near corporate and leisure demand drivers, which could include business districts, colleges, and tourist areas that will attract a large number of out-of-town travelers. Other factors that go into site selection include the condition of the proposed site and city design standards, as these can greatly impact the overall development cost of the project.
Corporate travel is the backbone of demand for new hotels in most markets, so we at The Witness Group look for markets with a strong corporate base. One of our largest hotel markets is in Columbus, Ohio, which is not only the state capital but also is home to The Ohio State University and numerous large corporations. The diverse demand drivers offer a stronger level of comfort with New Development and Acquisition opportunities in a market like this.
Indianapolis represents a strategic shift in how Development opportunity is viewed at The Witness Group. While we’ve always felt that a cluster of hotels in a specific region leads to operational efficiencies through the potential use of shared resources (Sales Managers, Area General Manager, etc.), the dual brand development on the north side of Indianapolis takes this a step further. The Marriott property, consisting of a Residence Inn and a SpringHill Suites, will share a lobby, meeting rooms, amenities, and parking, further highlighting the synergies that Witness is looking for.
In addition to the 180 key dual brand development, Witness is currently in the planning stages of a Home2 Suites in nearby Carmel. Both Indianapolis submarkets offer many of the market demand drivers that Witness finds comfort in, and the close proximity to each other further allows Witness to cultivate strong investments for its group.