For more than 25 years, Vision Hospitality Group, a hotel management and development company based in Tennessee, has been building hotels, weathering its fair share of storms amid changing market conditions.
“Every company creates value differently. Our company has historically created it through new development," Mitch Patel, Vision's CEO and founder, said on the Hotel News Now podcast.
Vision has developed 60 hotels in the past 25 years, with 12 in its development pipeline and five opening this year. Currently, Vision has 42 hotels across eight states in its portfolio.
But hotel developers are currently facing myriad obstacles this year, Patel said.
“It is a very challenging time for development. I don’t know if I’ve ever seen it more challenging than what it looks like today,” he said. “Anytime that there’s uncertainty in the market, there’s going to be hesitation — hesitation in consumer spending, hesitation in corporate spending, which really drives our economy, and there’s going to be hesitation in deployment of capital into investing into the hotel space."
However, current instability that's ongoing in part thanks to the Trump administration's back-and-forth announcements on tariffs isn't the only challenge Vision and the hotel industry as a whole are juggling. Patel pointed to interest rates, rising construction costs and an unsustainable imbalance of expenses and revenue.
"I think a lot of people are on the sidelines, and they are waiting and watching to see what happens next," he added.
At the Hunter Hotel Investment Conference last month, Patel challenged hotel companies to consider whether they have a brick or straw house heading into whatever storm is currently brewing. The metaphor is about focusing on what you can control, he said. For Patel, that includes the hotel brands Vision works with and maintaining a consistent company culture.
“This is a service business that’s layered on top of the real estate business, and that’s how you can really differentiate yourself from others," Patel said, explaining that consumers are using online resources such as reviews to make their decisions. "We live in a transparent society."
“How you run your hotels and how you manage your hotels are more important than ever,” he added.
Vision has navigated prior storms — such as the pandemic and the Great Recession — with this same thesis.
“When that storm comes, we don’t want to be fixing things or patching things. We want to be looking for opportunities,” Patel said.
Patel, who also serves as the chair of the American Hotel & Lodging Association, said that over the past few years, the leisure segment has grown but corporate hotel demand is making a comeback.
“When it does settle, we are going to see a higher percentage of leisure travelers in overall travel compared to before the pandemic," he said.
What hasn't changed is what travelers are looking for, and, to Patel, that's the basics of hospitality: clean rooms and stand-out service. Leisure travelers are also looking for value now more than ever, and one way Vision makes that happen is free breakfast.
“I’m a big believer in the complimentary hot breakfast in the select-service space,” he said. “It costs us like $4 per occupied room, but the perceived value is $12 to $15 a person.”
More importantly than simply providing this option, hotels have to be able to do it well. Consumers — at all tiers of hotels — are seeking an experience.
“More and more consumers are looking for an experience — even in the select-service space, not just the boutique hotel space in an urban destination market. They are looking for a good experience, even a unique experience,” Patel said.
To hear more about Patel's goals for Vision Hospitality and AHLA both, listen to the podcast embedded above.