It is always fun to walk around many kinds of shops, watch a favorite movie, have lunch, go to a nail salon, and stay at a hotel! This is so-called Mixed-use property. Mixed-use development generally includes at least three uses in one development, including residential, office, event space, restaurants, and/or hotel rooms. Because of the increase in usage, more tax incentives, design flexibility, and community engagement, there is more and more mixed use property in the world. Mixed-Use Hotel has been popular for investors since the security of a hotel being included in a mixed-use development not only limits risks but also increases the price of adjoining private residential significantly.
Benefits of Mixed Use Hotel
Community Shaping
When guests check into a hotel property, they’re not likely to just stay in their room. By creating a seamless transition from a hotel room to a coffee shop and shared gym space in a mixed-use development, guests get the sense they are in a community – not just a hotel. Attention to brand details through design, customer service and decor provide a comforting consistency to guests, residents, and shoppers. Mixed-use hotels create a unique experience that normal hotels cannot since guests can have a one-stop-shop experience.
Sales and Repeaters
Mixed-use hotels can transition your hotel into a lifestyle hub to come back to again and again rather than simply a place to stay.
Financial Support
Increasingly, cities and counties across the U.S. have updated their comprehensive plans, making mixed-use development easier in their communities and in some cases offered incentives for it.
Environment
Mixed-use development can provide benefits from an environmental standpoint. With restaurant or entertainment options within close proximity, hotel guests don’t have to depend on transportation as much. And since many mixed-use developments utilize existing buildings or under-utilized areas they reduce the need to take up more green space resulting in a much smaller carbon footprint than stand-alone projects.
Benefits for Other Retails
The opportunity to partner with a local spa or a restaurant group with distinct concepts can be instrumental in a mixed-use property’s success. Finding the right mix of retailers and entertainment options will not only increase brand awareness for your hotel, but the properties provide distinct experiences guests are unable to get at other area hotels. These experiences also can be integrated into the hotel by potentially using an on-site retailer’s items as in-room amenities, such as minibar offerings or welcome amenities.
Successful Targeting
Mixed-use allows you to focus on more specific travelers, which can increase your development’s sales performance. Integrating mixed-use can allow hotels to bundle packages and offer specific, themed staycations by partnering with tenants throughout the mixed-use development. If your development has a massage retailer and a restaurant with an extensive bar, you can package the stay as an “experience” and offer bundled deals to benefit both the tenants, hotel guests and other area consumers. These packages can help your property perform better on weekends and appeal to locals and visitors alike.
Challenges of Mixed Use Hotel
Greater Demand
Mixed-use generates a greater demand, so one crucial component when expanding an existing hotel to mixed use is ensuring your development has the capacity to hold additional tenants and guests. For example, developments need to ensure there are ample parking options and parking lots are accessible to all visitors to the property, not just hotel guests.
Difficulty with Multiple Tenants
There are some cases that tenants are not reflecting the hotel brand. Therefore, communicating and working with multiple tenants at once to ensure this synergy can be difficult to manage. Consistent representation and respect between hotels and tenants are crucial.
Difficulty for financers and developers
Because it is mixed-use hotel and everything is together in one building, financers have to evaluate each use separately. The developer may have to simultaneously market office, hotel, retail and residential space in order to move forward. Projects take longer and that is the single most deadly thing for real estate (since the developer is usually paying somebody for land or money while the project is crawling forward.)
Possibility of Anti-Urban
mixed-use developments can be anti-urban: the idea is to create a self-contained little world that people don’t have to leave.