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America’s Hotel Rush: Austin, Texas

Lather yourself with sunscreen, put on a tie-die shirt, strap on some cowboy boots and head to the Texas Hill Country where Austin, Texas has quickly become the country’s new hotel boom town. This unique capital of the lonestar state quickly came into the spotlight as tech companies like Dell, Apple, IBM, Google, Facebook, and dozens more set up operations in what has become known as the “Silicon Hills.” Austin is also home to South by Southwest Festival, Austin City Limits, and the University of Texas where more than 52,000 students are enrolled each year. According to Forbes, Austin has been the fastest growing city in the U.S. for the past four years with an annual population growth rate of 2.5%, 5.8% economic growth, and an unemployment rate of just 4.9%. With all of this growth, Austin is perfectly positioned for a strong hotel business.

Currently, Austin hotels cannot keep up with the demand and are running over 78% occupancy. Downtown Austin currently has about 8,000 hotel rooms and plans to increase rooms by 50%, adding another 4,000 rooms. Construction is everywhere downtown: Condos, hotels, office buildings, mixed use projects. These aren’t small projects either. Marriott has broken ground on the corner of Congress and 2nd Street and will build a $300 million dollar JW Marriott with 1,012 rooms; the largest JW Marriott in the country. Just down the street from the Four Seasons Hotel, the Fairmont has big plans to build a 50 storey, 1,031 room hotel with over 100,000 square feet of meeting space. Real estate companies are betting big on Austin and believe that demand will surely increase.

Almost all of the new hotels will include large amounts of meeting space. The Hyatt Regency just off of South Congress is adding a 600 space parking garage and a 25,000 square foot ballroom and meeting space venue. Austin sees itself as the next major conference city and wants to compete with traditional meeting & group hubs like Orlando, Las Vegas, Atlanta, and Chicago. Austin boasts year round sunny weather, a thriving nightlife and music scene, and an ever growing and positive business climate.

For the most part, Austin has your standard mix of chain hotels. There is a growing opportunity in Austin to combine the latest trends of the hospitality industry with Austin’s unique cultural and musical identity. Existing hotels like the Driskill on 6th or the Saint Cecilia off of SoCo are good examples of “true to Austin” lodging establishments. We are pleased to see that Austin is getting a 160 room Hotel Zaza with 216 luxury residences on West Fourth Street, just next to Republic Square Park. Hotel Zaza currently has one property in Dallas and one other in Houston and has quickly become one of Texas’ premier boutique, art hotels. JMI Realty is also building a Kimpton Hotel called the Hotel Van Zandt. This 16 storey, 322 key building is located at the end of Red River St., right in the heart of the Rainey Street district. Steps from Lady Bird Lake, a minute walk to the Convention Center, and on the doorsteps of Rainey’s hip bar scene, this hotel is the perfect location for a new boutique hotel.

Although all this development and growth means thousands of jobs, millions of dollars in property taxes, and an even more bustling economy, many Austinites share a nostalgia for the old Austin: a big city with a small town feel. Austin is clearly no longer a hidden gem, but it’s fate is currently being written. If done correctly, the city stands to become a world class tourist destination with some of the most unique hotels. Large chains and corporations need to adapt so that they keep Austin weird.  

Keep Austin Weird
Graphic by: Taximagic.com

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Political Dangers of Travel

There are many potential dangers faced when traveling. Most of these we consider from the mundane everyday perspective; pickpocketing, mugging, identity theft, etc. However one often overlooked danger is that of the political situation.

Travelers of all types whether they be on business or on vacation often rely on their governments to provide a threat assessment for them and warn them should a nation’s stability be in question. This is not always a possibility as political turmoil can happen in an instant. The military coup of the government of Mali is one prime example. This small African nation recently underwent a sporadic episodes of political upheaval resulting in a overthrow of its president. This situation presents a danger for travel of any kind. So then, how can one be sure that political turmoil won’t erupt while traveling? The short answer is no one can be sure. However there are some generalizations you can make before traveling.

Be wary of your nation’s past status on paying ransoms: If you are a citizen of a nation with a long history of paying ransoms you are more likely to be targeted for attack and kidnapping. This may seem like a scenario from “Taken” but it’s not, it’s very real and a lucrative business for those involved.

  • It is foolish to believe that your government will go to the ends of the earth to save you.
  • Learn if the country you are visiting is in good relations with your own, this is a fairly simple process that a few quick Google searches can clear up.
  • Investigate a country’s immediate history. Has the nation’s recent elections gone heavily contested? Is there public outcry for change?
  • ALWAYS check the state department’s website. There will be travel status updates on a daily basis, while this will not catch everything, as previously stated there is no magic crystal ball.
  • Know where your local consulate or embassy is located.
  • Follow the international news more frequently leading up to your trip.

There are some general tips for safety that are important to follow should you find yourself in a turbulent nation. Reducing your signature as a potential target is key to avoiding trouble.

  • Don’t dress like a target. While this may be overstated it still remains true, if you look like you might have some sort of wealth you are more likely to be targeted.
  • Stay out of unsavory areas, many guidebooks will tell you where to go and where not to go. A quick rule of thumb: if it looks dodgy it probably is.
  • Travel as light as possible, having too many bags sends the wrong signal as well as reducing your mobility.
  • Reduce the number of payment options you have, limit yourself to one or two credit cards, coupled with travelers checks.
  • Avoid large amounts of cash this will reduce the chance that someone see how much money you have.

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Brazil: Future of Hospitality Investment?

Brazil is perhaps the worlds best example of a country entering the height of its boom phase. The nation of 192,376,496 people has the population and education to support a wide spectrum of jobs as many companies are finding out. It is not just Brazil as the region’s economy on a whole is expected to grow at a pace 3 to 4 times faster than other more mature economies.

Companies of all shapes and sizes are finding a home in Brazil ranging from the tech industry to the manufacturing industry. This has served to dramatically drive up the average per capita gdp to $11,769. This growth is thanks in large part of the Brazilian government turning to foreign investments to grow their economy.

Brazil, San Paulo
Graph by: TradingEconomic.com
 

The result of this wave of development and investment, a fast growing upper and middle class with more discretionary income and few places to put it. Brazilians by all accounts are experience the joys of travel, they are gaining the opportunity to see the world. Consumption of retail goods was outstanding in Brazil as retail sales which were $266 billion in 2007, averaged $400 billion in 2010.

 

The most interesting and dynamic aspect of the Brazilian economy is how well it resisted the global economic downturn. It only saw minor decreases in its service industries. In fact

 
“Brazil 2010, finds that despite the global economic downturn, hotels in Brazil increased their average room revenue by 7.7% last year. Hotels upped their room rates by 10.4% in 2009”
– Jones Lang LaSalle
 

This resilience should ease concerns about potential investment in the country as the globe slowly crawls it way out of the economic hole it dug. Brazil is only going to grow its people will earn more and spend more as a consumer base is built as well as an appetite for new goods and services particularly from the west.

 

“he country is on course to grow five to six percent for the next four years, after an excellent 7.5% performance in 2010. The middle class is getting bigger; inflation is moderate; confidence is high; and wages are rising” – McKinsey & Company

 

By all accounts Brazil has a bright future. I have won not only going to host of the 2014 World Cup but also the 2016 Olympic games. These two events alone will bring in thousands of tourists as well as billions of dollars in investment to meet those tourists as well as the growth such grand events will stir up.   Rio Olympics 2016

Brazil is one of the BRICS (Brazil, Russia, India, China and South Africa) nations and as such should be watched for continued growth and potential investment. This is an economy that is burgeoning, it is developing across every sector. It is under this presumption that investment must be made with an eye towards the medium and long term success.

The Brazilian tourism market is primarily still domestically based. Many wealthy Brazilians tend to travel abroad, while those in the middle class travel within the country. Noted by HVS, “In the past 10 years, the flow of external demand has remained stagnant at around 5 million visitors per year.” Investors should be looking into the domestic populace with an eye on the upcoming Olympic and World Cup games. They should not depend on them, to foster permanent growth. Brazil as a nation will be entering a stage of growing pains as its government must sweep out the old and bring in the new. Establishing stronger infrastructure, reduced crime rates, and more importantly a more structured climate for businesses to grow in, free of corruption. If these changes can be kept on a steady pace substantial growth should be seen in the hospitality sector, add to this fact the more appealing nature of the tourism industry to westerns if it can provide them with the same amenities they left at home.