The legendary American hotelier Ellsworth Milton Statler once said, “Life is Service. The one who progresses is the one who gives his fellow human beings a little more, a little better service.”

This mentality proves applicable to any person or executive but especially to a hospitality adviser. As the founder and managing principal of Sion Capital, I have served a variety of developers, investors, operators, managers, lenders and others on countless assignments across multiple markets, cultures, and property types throughout my career.

Below, I share 10 best practices that I have identified during my entrepreneurial pursuit this past decade to help hospitality developers achieve success.

One of the main elements of a successful hospitality project is developing a concept based on a sizable market opportunity that caters to a clear audience, proving it is feasible.

A project must also be coherent with its surrounding area and present a competitive position. Hotels operate in dynamic ecosystems with many tangible and intangible factors, such as location, price, branding, quality, reputation, services, facilities and amenities. All attributes must be balanced within a development program.

A cohesive development program establishes parameters for all key variables, including theme, style, size, space, infrastructure, finishes, equipment, service format and standards that will influence the project’s competitiveness, investment and operation.

Another important yet common pitfall to avoid is not overbuilding based on the available development density of a piece of land. Instead, a project should be built to just the right size, based on that market and specific site’s unique dynamics.

For instance, planning a focused-service hotel on an urban site with unlimited development density would not call for a larger 400-room, full-service asset but rather an efficient 200-room hotel. This compact example would require minimal dining areas and event spaces, and fewer staff, as most of its business would come from transient travelers rather than groups, and most of the revenue would be derived from room rentals. Remember, bigger is not always better.

Besides tailoring a concept to a specific audience, creating barriers to entry for future competitors proves critical.

A significant entry barrier can be achieved when your project introduces a unique value proposition that generates resilience and relevance.

Additionally, a sustainable competitive advantage is attained when a product or service addresses a far-reaching market with a relevant offering that cannot be easily replicated.

A clear example of this concept is the Fontainebleau Resort in Miami, Florida, which has unique Morris Lapidus-designed architecture, sizable scale with significant amenities and beach frontage, and a broad scope catering to multiple guest types.

Undeniably, hospitality developers and investors take substantial risks.

While it is important that a new venture has an attractive strategic and cultural fit for a sponsor, sometimes a solid investment may not appeal to an individual but instead cater to a sizable customer base.

Fundamentally, a developer is not the sole end user of a product or service, and specific tastes should remain personal; however, well-conceived individual touches could add distinctive elements, like those observed at the hip South American hideaway Estancia Vik in Uruguay.

Besides staying impartial, it is vital to see the forest through the trees when conceiving a project. While attention to detail proves important, never losing sight of the big picture and the project’s purpose is what really matters.

The late pioneering Caribbean hotelier Sir Royston Hopkin, founder of Grenada's Spice Island Beach Resort, always put quality first over profit, despite encountering several new formidable competitors over time. Consequently, Spice Island received countless awards and accolades for many years notwithstanding some cyclical fluctuations in operating performance.

Presidents, athletes and global business leaders alike hire trusted advisers, and hospitality developers and investors should do so, too.

Hiring specialized "consiglieri," such as technical business consultants, lawyers and architects, among others, is money well invested and crucial to obtaining independent expertise, especially within the complex hospitality sector.

Besides providing objectivity, a seasoned adviser can add value to a project through a deep understanding of the industry, learnings from past experiences and access to key relationships.

American investment tycoon and philanthropist Warren Buffett has said, “Never ask a barber if you need a haircut.” The same applies when dealing with hospitality service providers and other counterparties.

For instance, a business development agency may court a hospitality developer with fiscal incentives or tax breaks, but what if there is no profit to be generated in the underlying venture due to other unfeasible deal elements?

Thus, verifying and validating main assumptions with the support of trusted advisers mitigates risk.

Developers must do their homework to determine what elements provide a unique value proposition that a guest is willing to pay for and what makes business sense.

A hospitality venture often involves multiple stakeholders, with goals and time horizons that are inherently different.

For example, an inexperienced interior designer may suggest some beautiful high-end materials that are not commercial grade and that would require replacing more often; or, a market may have significant undisclosed new supply that could impact demand levels during an absorption period, which would require proactive contingency planning.

Ultimately, gaining alignment with key constituents improves the likelihood of success.

Inevitably, things do not always go as planned, so being agile and a step ahead allows savvy sponsors to pivot and adjust accordingly to unforeseen changes in the hospitality business.

One of Benjamin Franklin's most famous quotes is, “By failing to prepare, you are preparing to fail.”

This quote could not ring truer for the intensely competitive lodging industry.

For example, a project developed with an emerging chain may incorporate critical global fire- and life-safety standards into its design to be eligible for a potential brand conversion, if needed.

And, while it is common to aim for the upside when developing a new venture, it is absolutely necessary to incorporate downside protection to minimize possible losses.

Be unique and never exactly “copy and paste” from a previous project.

Despite existing within an established industry with considerable standardization, defined segmentation and clear similarities, each project site and market has distinct nuances and there is no one-size-fits-all approach.

The founder of the renowned Aman Resorts and other high-touch brands, renowned Indonesian hotelier Adrian Zecha, is recognized for developing distinctive properties that redefined the destinations in which they were located.

Besides being adaptable, a hospitality developer should always negotiate yet also remain reasonable.

Competitive business bidding processes enable comparisons and better terms; and, during these processes, successful project sponsors should engage different professional advisers to always read the fine print at the bottom and help negotiate alignment on their behalf for the best terms possible.

As a new world emerges following a pandemic unlike any other humanity has endured since a century ago, let us continue to support, develop and invest in the global hospitality industry — to do a little more and be a little better service to progress.

Jonathan Kracer is the Managing Principal of Sion Capital, a hospitality and real estate consulting and investment firm focused on the North American, Latin American, and Caribbean regions. Contact him at info@sioncapitalco.com.

The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Columnists published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thoughtful and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.