Shopping center landlords and hoteliers are striking up more joint ventures than ever before, in an effort to bring customers to their properties, according to experts at a RECon panel titled “Alternative Use — Hotels.” As exhibit one, moderator Timothy Marvin, executive head of the JLL hotels and hospitality group, pointed to the announcement a few days ago that Marriott International would open at least five hotels at Simon’s shopping centers in the near future, the latest in a succession of similar hotel deals made with Simon.
As hotels and developers build partnerships, retailers welcome them today much more than they did five years ago, said John Ward, president of 505Design. “The battles you used to have are almost all gone away,” he said.
Tom Lorenzo, Hilton’s vice president and managing director of development for the Northeast and Canada, said developers began showing noticeable interest in adding on hotels a few years ago. Retail landlords began picturing their properties in more-prominent locations than in the past. At the same time, Hilton’s strategy has shifted from a focus on access to highways, to access to retail, Lorenzo said. “Our select segment may have breakfast, but our customers are looking for places to eat, shop and be entertained,” he said.
Pyramid Management Group, owner of 16 malls in the Northeast, opened a 209-room Embassy Suites Hotel at Destiny USA, in Syracuse, N.Y., last year. The company is also opening a 192-room, dual-branded Tru by Hilton and Homewood Suites by Hilton at the Crossgates Mall, in Albany, N.Y. Pyramid began looking at diversifying its properties about 10 years ago and thought that owning hotels was the natural direction to go, said James Soos, the company's director of development. To date, the retailers have welcomed the decision.
“They understand the level of investment that we are making,” Soos said, “and that the end goal of extending length of stay and bringing more people into the centers is a benefit to them.”
By Joe Gose
Contributor, Shopping Centers Today