13 minute read
No Reservations
from CCR July 20
No Reservations Hotels plan on making their comeback
By Erin Kirihara & Brian Lowder
At the onset of the COVID-19 pandemic, some hotels pivoted to housing frontline healthcare workers, in a gesture of compassion that epitomized the hospitality business. But as the first wave of the virus ebbed, a stark reality emerged. Now, the hospitality sector is confronting a radically different future, as hotels—both new-build and renovation projects—will be redefined on all fronts, from development to design.
Impacted by the steep decline in travel and meetings and conferences, the business is facing a wholly different landscape. While America is in a recession, the hospitality sector is in a depression. In April 2020, the first full month of the epidemic, numerous properties were positioned to lose money by keeping their doors open. That led to more than 5,100 temporary closures around the country, and the loss of nearly four million industry jobs. According to the American Hotel & Lodging Association (AHLA), the coronavirus outbreak has cost hotels in the United States more than $23 billion in room revenue since mid-February.
Redefining risk As they begin to chart a path forward, hotels can find themselves caught in a web of
conflict when it comes to accountability and compliance. Shifting risk and responsibilities between hotels, airlines and governments. For example, there is ongoing finger-pointing about which entity should administer temperature scans to travelers, which continues to contribute to the confusion. Like many businesses, the lodging industry is grappling with the looming issue of liability, which is a two-way street. As properties open up, labor unions are seeking protection for members who are hotel workers, while operators are looking to minimize their exposure to potential lawsuits that might be brought by guests or employees who claim to contract the coronavirus while at the property. By enacting and following reasonable safety precautions, visitors and hotels enter into a relationship of shared responsibility.
Waivers releasing or limiting liability, especially for conferences and meetings, will likely become common.
The evolving business model It is clear that in the wake of COVID, the business model for hospitality projects is going to change. Amenities will be limited: In-room minibars and coffee machines will be enhanced; service in bars and restaurants will be curtailed; gyms, spas and pools will have restricted access. At the same time as perks—and profit margins—are trimmed, and properties prepare for a new operational reality (which must balance federal, state, and local laws and guidelines), they are making very public declarations about their cleanliness campaigns in an effort to assuage consumer anxiety. Rebuilding confidence will be a critical factor in the industry’s effort to coax customers to return.
Near continuous cleaning, whether performed by robots or human staff, will be conspicuous, and is often being developed in partnership with brand-name manufacturers of commercial cleaning products, such as Clorox or Lysol. Prominently posted social distancing guidelines, temperature scanning and disinfecting ultraviolet light sweeps will work in tandem with touchless, mobile-based check ins, keyless room entry and hands-free elevator activation.
Funding — A higher bar For new projects, lenders are wary, making borrowing especially problematic for developers who are seeking outside funding. Developers who can show they have in-house funding or who are a cash
owner have a stronger case to make to lenders. Financiers are going to want to ensure the owner can pay back a loan, a case that is hard to make without guests to ensure sufficient, steady revenue. New starts located in primary markets with mixed-use density in close proximity will be the first to get financing. Any projects that do not already have financing or final entitlements already in place will likely be pushed 24-36 months out. Existing properties also face difficulties. In particular, large luxury hotels that carry massive debt are most endangered, with corporate vultures already circling owners who cannot make their loan payments. On an ongoing basis, hoteliers will be challenged to balance their interests with the cost of implementing the new safety protocols. As income from food and beverage service and meetings declines, the cost of enhanced housekeeping operations is rising. The upshot of this is that revenue per available room (RevPAR) is going to take a big hit, as consumers will balk at paying more money for a diminished guest experience. According a revised forecast by STR, hotels are projected to report a 50.6% decline in RevPAR this year. With roughly six of 10 rooms on average empty, already wavering pricing confidence will push the average daily rate down to a six-year low of $112.92.
Business as unusual As the pandemic forces a rethinking of hospitality from the ground up, hoteliers are exploring alternatives. Some large companies are investing in extended-stay hotels, hoping to attract returning business travelers with their in-unit, private cooking and dining features. Others are looking at converting some of their properties into office space. In Los Angeles, select properties are restructuring to offer residential condos within their buildings. In Hawaii, where the industry is confronted with a recovery period that may extend up to three years, several designs are being explored to convert hotels into surge units for hospitals, coming full circle from when, at the beginning of the pandemic crisis, hotel rooms were occupied by doctors and nurses. CCR
Erin Kirihara, Senior VP of Rider Levett Bucknall, is based in the firm’s Honolulu office, where she directs all aspects of client relations, project oversight and strategic growth for the Hawaii region. Brian Lowder, Principal and Senior Project Manager, is based in the firm’s Los Angeles office. He has more than 30 years of experience managing new construction, renovations and expansion projects in the hospitality, education, residential and healthcare sectors.
Thinking out
of the box By Craig Henry & Frank Ricks
3 keys to successfully renovating retail centers
The ease and convenience of online retail purchasing, coupled with revitalized downtown city centers offering a walkable boutique shopping experience, has made the traditional shopping mall virtually obsolete. Many city and suburban landscapes are dotted with vacant malls surrounded by a sea of empty asphalt parking spaces. While some stand-alone “big box” stores are finding a second life as outpatient healthcare centers, many larger multi-tenant malls are having a more difficult time reinventing themselves.
The recent transformation of The Hill Shopping Center, a mid-century modern facility built in Dallas in 1977, is the perfect blueprint for revitalizing underutilized and abandoned retail shopping centers. Offering more than 236,000 square feet of retail and office space, the Hill’s proximity to Dallas’ most affluent neighborhoods to the west, and the growing millennial population further east and south, as well as the 9 to 5 workforce pedestrian traffic, made it an attractive property for renovation. Cypress Developers, inspired by recently opened and successful pedestrian malls in other downtown city locations, wanted to create a unique retail destination experience at The Hill. Members of the project team partnered to collaborate on the early concept
and schematic design to help reinvent the aging complex to meet the growing demand for retail and restaurant experiences that provide a community “sense of place.” One of the first decisions they faced was to ascertain the financial viability of the project and determine the level of investment the property required. The outdated retail center featured weathered brown brick buildings with radius corners and nautical windows. The design made it difficult for tenants to project individual brand visibility. The Hill had clearly outlived its current incarnation, yet the configuration of indoor and outdoor spaces anchored by an interior courtyard offering a shady oasis under the canopy of mature oak trees inspired a potential second act.
The project team’s vision was to revive and elevate the development by embracing an authentic, cutting-edge yet preservation-minded approach with a strong emphasis on sustainability that maintained the integrity of the 1970s architecture. They sought to transform the outdated space by implementing design strategies that would create a walkable, visitor-friendly sequence of proprietor-driven shops and restaurants with a decidedly “un-mall” feel. Their vision focused on three key renovation strategies: Incorporate “AH HA” Design Elements, Preserve and Enhance VS Demolish and Replace, and Focus on Tenant Brand Identity.
No. 1 — Incorporate “Ah Ha” Design Elements To help keep a visually arresting destination, designers focused on façade material selection, incorporating local artwork and murals and created zoned color palettes to enhance the development’s visual identity. The goal was to make each tenant feel like an independent storefront by giving each its own distinctive look and feel within The Hill. By varying heights and incorporating rainscreens onto roof and façade designs, the overall expression creates interest and intrigue around every corner, encouraging visitors to continue moving throughout the site and discover their next “ah ha” moment. The design team also integrated multiple, interconnected grade changes across the site, creating an easily accessible experience. Special attention was given to ensuring there were no “dead zones” or spaces that were not interlinked to the rest of the development. Careful massing and attention to sight lines provide glimpses into the corridors and alleyways that lead pedestrians to the inner shaded courtyard. Another visual element that differentiated this project from the local retail competition was the integration of artwork. The team worked with 10-plus different local artists whose work is displayed throughout the space. In some areas where waterproofing was exposed, several artists were commissioned to paint murals. These not only created aesthetic appeal, but also helped diversify the building materials chosen to optimize cost and value, such as cement fiber and ribbed metal panels. In this project, metal panels were creatively combined with fire-treated cedar and cost effective cor-10 panels in a way that created interest and did not look inexpensive.
No. 2 — Preserve and Enhance vs Demolish and Replace In order to be financially viable, the design team was challenged to reimagine and change the perception of what was basically a hodgepodge collection of unappealing brown brick buildings. The budget did not allow the buildings to be demolished and replaced. The ideal became how to make each building into its own work of art—on a challenging budget. The design team developed a cost-effective solution—use the façades of the existing buildings as an underlying canvas, and then add layers of new materials, rain screens, new storefronts, canopies and signage to create visually appealing neighborhoods that would draw visitors throughout the campus and into the center courtyard.
INNOVATIVE METALS COMPANY, INC.
Because one of the primary goals and an integral part of the project’s vision was preservation and sustainability, the design solution did not cover up the old façades, rather considerable effort was focused on how to attach the new layers to the old skin. The goal was not to destroy, but enhance. Visitors still can see original brickwork and appreciate the center’s history and architectural past while enjoying its new vibrancy and transformation. In some cases, these layers also had practical value. Rain screens, for example, were used in layers to help maintain the building, protect it with waterproofing and enhance façades. The most significant challenge was convincing the construction team that the layering approach could be implemented. Much of the construction had to be handcrafted—nothing was “off the shelf.” 3-D modeling helped bring the designs to life, facilitating a true collaboration between the design team and construction field team.
No. 3 — Focus on Tenant Brand Identity One of the primary design goals in repositioning the shopping mall was to create a retail environment that did not feel like a traditional mall. The key was to customize each tenant’s storefront to help it stand out from the crowd. This is the opposite of how shopping malls are designed and required the architects to preplan how the buildings could be “broken up” to appear as individualized storefronts. The developer’s challenge was anticipating the unknown, as Cypress needed to be flexible so tenants could customize their individual units, while adhering to and complementing the overall site continuity. Because signage and company logos are critical identifiers and an important means of differentiation, the design team needed a way to allow tenants to incorporate their unique corporate branding on the signage, but within guidelines that ensured a degree of site-wide consistency. The original plan was to develop custom storefronts using wood, aluminum, steel and bronze in different colors and/or designs. But high construction and fabrication costs required an alternate approach to achieve a similar semi-custom, look but within a reasonable budget. The signage key became less about design, and more about how to convince retailers, owners and tenants that their signage could complement the developer’s vision of a “un mall.” To facilitate tenant buy in, the design team created a “Tenant Signage Guideline” manual. The guide clearly identified the vision of the revitalized complex and signage design parameters, and three to four options for the signage location. Every tenant space was assigned a zone with a color palette, so that not all signs would look the same. Each tenant presented their signage concept for approval by the design team. Different types and colors of aluminum were used for each storefront (door pulls and handles), allowing each tenant to reflect their own identity. Examining all the possibilities in advance and setting reasonable boundaries provided a good balance of creativity and standardization.
The new “must visit” foodie and retail destination Seeing an available opportunity, Cypress Developers created something so unique that it is implementing a marketing tagline called, “A retail center that Dallas didn’t know it needed.” The project’s conscientious design approach resulted in a destination development whose unique features and fresh optics stand out in a crowded and evolving retail market. Many of the design features were customized as the tenant roster was confirmed. At the end of design and construction, many leases were with restaurants. The tenants are mostly restaurants offering health-conscious, local, sustainable offerings and the trend is toward mostly outdoor dining experiences. CCR
Frank Ricks is a founding principal of LRK and oversees complex design and planning projects across the country, focusing on projects that require strong leadership in design and process of delivery. He can be reached at fricks@lrk.com.
Craig Henry brings more than 20 years of design experience to his role as director of LRK’s Dallas office. He has completed a number of award-winning projects of varying types and sizes, including multifamily residential, civic, education and corporate. Henry can be reached at chenry@lrk.com.
