ATLANTA — With volatile tariff policies and ongoing economic and travel concerns abounding, hotel owner Pete Patel said he's starting the year more nervous than he'd like to be.
Patel, CEO and founder of Atlanta-based Nexera Capital, said during an interview at the Hunter Hotel Investment Conference that he's already seen a drop in visitors from Canada at the AC Hotel Seattle Downtown, which is in his portfolio.
“We’ve seen a major reduction in travel from Canada, so that’s something we obviously weren’t factoring in last year, and now that’s something that’s real, and we have to factor that in as far as our growth and our revenue growth for next year,” he said.
Another unexpected headwind he's having to factor in is the possibility of tariffs affecting his business, and at this point, it already has. What's left to discern is how much tariffs will be a problem for him.
“We just had a call with one of our contractors who wants us to add a line item for tariffs, so that could change next month, but now we have to start factoring that into our project costs," Patel said. "It’s scary, we just don’t know how that’s going to end up.”
But Nexera, which focuses on high-barrier-of-entry markets, is seeing success in building select-service hotels due to the company's ability to operate efficiently, Patel said. The company has 13 hotels open in its portfolio now and another handful under construction, plus several in the longer pipeline.
“Labor is a big issue in our industry right now, so building a hotel that’s efficient where you don’t have a lot staffing required is really important in this environment and building select-service hotels gets you there,” he said.
Although he's keeping a close eye on the ever-changing political and economic landscape, Patel said he's looking forward to a few upcoming hotel openings over the next year or so. The Moxy Atlanta Downtown is currently under construction, and a dual-brand Home 2 Suites and Hampton Inn in Nashville is also in the works for Nexera.
“What I’m excited about this year is opening our hotels,” Patel said. “We have three under construction right now, and our goal is two open this year then one next year. Our pipeline is robust.”
For more from Patel, watch the video above.