Dan Hansen, chairman, president and CEO of Summit Hotel Properties, Inc. (NYSE: INN), joined Nareit for a video interview at REITworld 2017.
Summit focuses primarily on owning premium-branded, select-service hotels in the upscale segment of the lodging industry.
Hansen described the acquisitions environment as “very challenging,” in part due to the abundance of commercial mortgage-backed securities (CMBS) financing.
However, Summit has been successful in finding off-market transactions and dealing directly with owners, Hansen said. Summit expected to close on nearly $600 million of acquisitions in 2017, he noted.
Hansen noted that supply in the lodging industry is currently growing at a rate of about 2 percent annually nationwide. Longer term, he expects supply to be kept in check by rising construction costs and labor shortages.
Turning to future trends in lodging, Hansen pointed out that “the functionality of hotels and guest preferences continue to change.” For example, fitness centers have become more important than spas, while grab-and-go cafes and a light menu option have become more important than a full bar and restaurant, he explained.
“As an industry, delivery of that higher-quality experience is starting to permeate through select-service hotels,” Hansen said.