Midscale Segments Still The Place To Be

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Judging by the stories we've written this year, brand companies must believe the midscale segments — the upper and lower end, with or without food & beverage — are the areas of most opportunity. We've had cover stories on relaunched (Holiday Inn), redesigned (Fairfield Inn), revived (Baymont Inn & Suites) and revamped (Best Western Premier and Plus) brands, and we've written features about Choice Hotels' redesign of its core Comfort Inn and Comfort Suites brands, and about new initiatives from La Quinta to aggressively upgrade its in-room entertainment.

Everyone is fighting for their piece of the pie, for both guests and franchisees. Fairfield's new Gen 4 prototype was all about getting away from the “sea of sameness” within the segment, avoiding being just another “beige soul-sucking box.” Maybe in different words, everyone else is trying to do the same thing. Holiday Inn started a few years ago and with the remake complete, the brand is reaping the rewards: It earned top honors from J.D. Powers for guest satisfaction in the midscale with f&b segment (or upper midscale as STR now classifies it).

Summing it up best, and far more succinctly than I am, was Mitch Patel: “I really like this upper midscale segment,” said the CEO and president of Vision Hospitality Group, owner and operator of 17 properties. “Lenders love hotels there, guests do and developers do.

LH columnist and valuations expert John O'Neill recently wrote this summer that the upper midscale segment was poised for strong improvements in market value (11% this year and next), and the midscale segment would see increases of 7.6% and then 10.9%. Later in the summer, J.P. Ford of Lodging Econometrics told Ed Watkins most new construction would be with proven brands in the upper, upper midscale and midscale brands. He said 78% of the pipeline is for properties in suburban or highway locations.

As the industry and economy continues its recovery, the upper midscale and midscale segments are once again proving to be the most attractive to travelers and developers. Brand companies are doing their best to take advantage.

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