NEW YORK — When there's uncertainty in the market, it's the job of a hotel operator to focus on what owners need, from expense growth management to driving value.
Jason Rabidoux, chief investment officer at Davidson Hospitality Group, said that mindset has been his goal this year.
"We have to prioritize our owners right now," he said in a video interview at the recent NYU International Hospitality Investment Forum. "It's a tough time. RevPAR growth is quite a bit more muted. Expense growth continues to be a big piece of the equation. That's what we're hired to do — to create value for our owners. First and foremost, we've got to focus on them and how to continue to do what we do best, which is create value for them.
"I think if you wake up as a manager every day thinking about what can we do to create value for our ownership partners, I think you'll end up finding your way to success," he added.
And the current season of uncertainty could translate to business opportunities for Davidson, which started the year with a new ownership structure. In November, private equity firm Nautic Partners acquired Davidson after KSL Capital Partners had owned the company for nearly a decade.
"This is a period of time when we go through disruptions in the industry — a little bit of stress — where we see a pretty significant flight to quality from a management standpoint," Rabidoux said. "So while a lot of our business is driven on the growth side by transactions, we're seeing a pretty decent uptick in management inquiries as a result of just what's going on in the environment."
Another opportunity Rabidoux is seeing in the hospitality industry is travelers' shift to prioritizing experiences.
"I have felt this for for years now that the hotel business, in my mind, used to be very transactional. 'All I want is a clean room, a nice shower and in a place to relax.' Now, design becomes much more critical, experience becomes much more critical," he said.
Rabidoux said this shift is what has driven Davidson to be passionate about the Margaritaville brand and its very specific experience. Brands have kept up with this trend by creating more soft brands. These days, travelers might be loyalty members, but they are going to stay where there's the experience that they are looking for, he added.
Even in light of this shift, core branded hotels will always be at the heart of what Davidson does, but when it comes to the future, these types of hotels play a role, he said.
"As we look at opportunities of growing the platform, expanding the portfolio, I think those opportunities to continue to lean into very experiential lodging assets is not only something that plays really, really well to the platform that we've built out ... but I also think that's where the consumers constantly go to," Rabidoux said.