Just when you thought you knew Alicia, the AJC Design blog is getting creative once again. Instead of an interior designer’s view on the hospitality industry, for the next few months we’ll be featuring experts from all aspects of the industry to give you some new exclusive perspectives. This month, AJC Design talked to Michele Mahl, Hospitality Real Estate Expert.
AJC: The hospitality industry got hit hard during the pandemic. What has the rebound been like? Were there any silver linings that came from this difficult time?
MM: Initially, the market expected a significant wave of distress, however, with so much capital available, we did not see that big wave. We saw destination and drive-to resorts outperform urban markets, leading transaction activity. During the rebound, we witnessed remarkable demand to return to travel; people wanted to get out of their house.
AJC: Do you think the travel spree is going to continue, given inflation?
MM: Yes the demand is still there to travel and we don’t expect to see much if any impact in the upper upscale and luxury sectors. The significant disposable income of those travelers are not likely to change their travel spending habits because of inflation..
AJC: What are the key qualities any hotel broker needs to have?
MM: It’s very much a relationship-driven industry, so brokers need to be know the investor universe and be adept at connecting the dots, knowing when a property is an ideal sale candidate and who the likely buyers are. Brokers need to have a pulse on the market, who the capital is chasing transactions, when is the optimal timing to achieve maximum pricing and the appropriate execution strategy.
AJC: What is the most exciting part of your job or your most exciting deal?
MM: That’s always a tough question, but I would say most recently it would be the DoubleTree Metropolitan in NYC. We marketed the asset, which remained closed during the pandemic, to hotel investors as well as alternative users. The asset ultimately sold to a converter. I really enjoyed working alongside the client for a tough execution to achieve their objectives.
AJC: What has been the most challenging part of your job and how do you handle it?
MM: The biggest challenge today remains the debt markets. Given the high interest rates, the cost of capital is too high. Once we see the Federal Reserve stop increasing rates, we can expect to see an increase in transaction activity.
AJC: Do you have any 2023 projections for the hospitality industry? What trends are you seeing?
MM: 2022 was a soft year with not much transaction activity. People expect to see the same in the first half of 2023 with the hope that there is an increase in transaction activity during the second half of the year, given the significant capital on the sideliens. There is also the sense that urban markets will see performance increase as travel continues.
AJC: To top off this interview, we’re going to do a rapid fire of quick questions. We want the insider’s view on the best hotel you’ve ever stayed at? Favorite restaurant in NYC? Best rooftop? Go-to weekend getaway?
MM: So for Best Hotel, I’d go with The Mark Hotel in the Upper East Side and for restaurant, the Jean Georges, which is part of hotel. I also love TBar. My go-to weekend getaway is definitely the Hamptons in the summer. I would highly recommend the Topping Rose, Bridgehampton Inn Restaurant, and once again TBar South for an exceptional dining experience. For an outdoor wine spot, everyone always loves the Wine Stand at Wolffer’s.