Hospitality Report: Hotels are catering to the traveler’s search for experience - November 2022

By Jessica Chevalier

Americans are packing their bags for travel again, and the hospitality industry-so severely stunted amid the quarantine days of the Covid pandemic-has found its lobbies again bustling and its rooms again occupied. With that activity, of course, comes building, renovation and conversion projects, and flooring manufacturers serving the sector report that business has been good-brisk, even-as hoteliers respond to the leisure traveler’s desire to have their dollar buy them an experience along with a night’s sleep and a continental breakfast.

HOSPITALITY DEMAND
To recap hospitality sector activity of the last few years, the industry saw its life flash before its eyes in 2020 with the proliferation of Covid-19 across the U.S. and subsequent lockdowns. After a pause, construction projects that were, essentially, too far in to be halted commenced, and that generated some need for flooring. When the summer of 2020 arrived, Americans were hesitant to travel by air, but, eager to break free of their four walls, many opted for summer road trips, and drive-to destinations fared well. That being said, with business travel at nearly a total halt, 2020 marked the single worst year for the hospitality industry in recorded history, according to STR.

In 2021, as the construction projects underway were finished up, the demand for flooring went slack. Quarantine-weary Americans were traveling again, but business travel was still virtually non-existent, so activity was heavier on the weekends, with downtown, convention center-style properties that cater to business events suffering intensely.

2022 has brought a return to a degree of normalcy for many Americans. The challenge, however, is that while many are getting out and about more regularly, we, as a workforce, have inherently changed. Having gotten a taste of work-from-home life, many corporate Americans are reticent to return to 40-hour workweeks in an office, which means that, at present, corporate transient demand is a total wildcard, says Jan Freitag, national director for hospitality market analytics at CoStar. “I get asked about this all the time,” Freitag reports. “I have access to the best data in the world, and I have no idea what level of corporate transient demand we’ll see. In fact, we don’t yet fully know what the return to office looks like. Is it five days? Zero days? In between those? And what days are ‘office days’? If I can choose my day, I might as well choose Monday. And if you aren’t in the office the day that I come in, we will end up meeting over Zoom anyway.”

What is known for certain is that the amount of sublet space in downtown locations has skyrocketed, more than doubling, presumably as corporate leadership realizes that it no longer needs the square footage it once did. “People aren’t going into the office, and they aren’t traveling,” says Freitag. “In late 2020, Bill Gates said that 50% of corporate travel would disappear. That’s wrong, but we still don’t know what’s right-probably a 10% to 15% decline.”

However, without the 40 hours a week of togetherness coworkers once shared, leadership may be eager to get its community together and build culture in other ways-such as through travel-based events. “There are meetings today that didn’t exist in 2019 because we had a water cooler,” says Freitag, who believes that, moving forward, smaller meetings may be clustered around larger events-as in the flooring industry with so many meetings and group gatherings packed into the days before and after Surfaces-to ease the cost and disruption of business travel. “When people get together like this, the cost-per-contact comes way down,” says Freitag. “We can still touch the same number of people, but we don’t need to fly to six different places to do it.”

As for leisure travel, which Freitag believes saved the hospitality industry through the Covid downturn, it is expected to maintain, though the lower end may be impacted by the possible recession. However, “the upper end will do super well,” says Freitag. “There is almost no price resistance on the very high end. Leisure is resilient and will continue to be.”

David Duncan, senior vice president of sales for Durkan Hospitality, confirms that, while demand is fairly strong across North America, leisure travel projects continue to drive flooring demand. “The biggest part of hospitality is select service, and activity in most of these hotels is driven by property improvement plans,” Duncan says. “We are starting to see activity pick up in upper upscale-full-service properties with convention space and restaurants-with group business starting to come back. It hasn’t yet reached 2019 levels, but it is rebounding, and that’s driving renovations there. We expect that activity will continue over the next couple of years.”

“We have seen project work come in at a pace on par with 2019 and, at moments, exceeding 2019,” says Shaw Contract’s director of hospitality, Cindy Kaufman. “I believe this is due to the pause in hospitality projects amid the pandemic, which was just that-a pause. Now that the switch has flipped, we’re seeing pent-up demand from projects put on hold or not started in the pandemic, in addition to projects that would have started now anyway. So, activity has been tremendous. Of course, everyone is playing close attention to the Fed. There is talk of a recession, and inflation isn’t helping, but when I look at data around lodging economics, I see no red flags. Properties have to meet brand requirements. And if renovations were on hold during the pandemic, those grace periods have run out.”

So, is it renovation, conversion or new construction business that is generating activity?

“Conversion and renovation projects are currently most active in our business,” says Kim Drautz, president of Tarkett Hospitality. “The market also has an all-time high of projects in the early planning phase, so we are moving in the right direction despite intermittent slowdowns on new construction.”

Morgan Stephenson, director of hospitality for Dal-Tile Corporation, reports that activity has increased significantly over the last 12 months. “Renovation continues to be the leader over new construction this year, primarily due to the current finance climate,” says Stephenson. “Mid-scale has performed very well. Economy proved to be significant during 2021 and early 2022, while we have also seen the return of our larger resort, full-service and luxury projects. Texas, Georgia and New York continue to be significant regions for hospitality development.”

Adds Brooke Dominy, national accounts sales manager for hospitality and healthcare at Crossville, regarding regional activity, “We currently have a great deal of momentum in the West Coast and Hawaii, central U.S., and Southeastern markets. Our trends are mimicking the ‘top US cities to live’ list for the most part.”

Emser’s Zoe Rahimi-Nolen, director of hospitality and gaming for Emser, notes, “Renovations are on the rise due to brand pressures to complete deferred property improvement plans. We should continue to see this over the next two to three years.” And she adds, “Per recent studies by Lodging Econometrics, it is cheaper to buy a hotel than it is to build a hotel right now, with prices roughly 25% below replacement costs, on average. Hence, renovations are on the rise versus new construction.”

“Demand is rising in all levels of hospitality, from economy to luxury, in Airbnbs and other properties,” says Kendra Mahen, vice president of sales for HMTX’s Aspecta North America.

And, notes Darci Sassen, vice president sales and marketing in the Americas for OW Hospitality, “We are currently working with the largest workload in our history.”

HOSPITALITY SUPPLY
The number of factors that impact the hospitality market seems almost innumerable. The will-theys and won’t-theys of determining how Americans will move from place to place is driven by a host of factors. Consider post-Hurricane Ian Florida, for instance. While many hotels in hard-hit zones will be out of commission for extended periods or even forever, those that survived the deluge will likely be bustling, as first responders, construction workers and other essential personal descend on the state to assist with rescue and cleanup.

Demand is an important factor in hospitality, but so is supply. The number of new rooms in the construction pipeline has declined, from 212,000 in January 2022 to 155,000 in August 2022, and Freitag expects further deceleration as the cost to borrow money becomes more expensive. That being said, some smaller and mid-sized markets may feel a big increase in supply if, for instance, they add 500 rooms in what was a 3,000-room market. That doesn’t change the landscape for the national market much, but it does substantially change the landscape for that metro area.

On the transaction side, the market has also seen a slowdown in buying and selling, partially due to the increase in interest rates. “Deals will get done,” says Freitag, “especially among small regional players, one-offs selling to other one-offs using local funding. There is also a lot of interest at the very high end. Anbang Properties’ portfolio is on the market; this includes two Four Seasons and the Montage in Laguna Niguel, California. They are asking $700 million, or $2.8 million per room. Will they get it? It’s likely. In a global recession, parking foreign currency in the dollar is a good thing. And parking it in an asset that is irreplaceable makes sense, so the high end of the market will attract buyers, but transaction volume will decline from last year’s level.”

Lastly, new owners may find themselves shouldering substantial renovation costs. Over the course of the pandemic, banks allowed cash-strapped hotel owners to pay interest with their FF&E (furniture, fixture and equipment) reserves. Now, two and a half years in, those funds are depleted, and hoteliers are unable to afford renovations and are putting their properties on the market. Freitag adds, “The brands will say, if you are the existing owner, here is your property improvement plan, but if you are selling the property, here is a bigger property improvement plan for the new owner. So, we will see lots of renovations coming because we haven’t seen them amid the pandemic. If you are a resort hotel, you have been sitting pretty, but leisure travelers are hell on rooms, so there is lots of wear-and-tear and renovation needed there as well.”

HOSPITALITY FLOORING SOLUTIONS
Luxury Vinyl: As hard surface has become more appealing in the home, it only makes sense that the home-away-from-home follow suit. Guests’ acceptance of the material may have come at just the right time for hotels, which have found themselves shorthanded on the housekeeping, facilities and construction fronts, as the material is, under many circumstances, easier to clean than broadloom and with a longer useful life.

There is, perhaps, nothing that can ruin a hotel stay more effectively than poor acoustics. And hard surface flooring manufacturers have worked hard to create solutions that yield acceptable IIC-rated installations, though those needs vary according to the construction of a property. Therefore, owners will often have their property’s acoustics assessed and use the resulting information to decide whether to go soft or hard in guest rooms, says Duncan.

While LVT does bring some benefits to the floor for owners, one of the factors most driving the transition is guest satisfaction. Guest surveys are highly regarded by hospitality providers, and guests overwhelmingly like LVT for its perceived cleanliness. In addition, based on these surveys, some hoteliers have tightened their standards around LVT specification to ensure that poor acoustics don’t impact guest stays, reports Allie Finkell Bruski, director of business development for Milliken Hospitality.
As is true of the high-end residential sector, the material hasn’t yet made overwhelming entry into the boutique and luxury tiers of hospitality, but it is planted more firmly within the middle and economy end of the market. However, Kaufman reports that on a recent stay in a luxury resort in California, she noted that Shaw Contract LVT was being used in guest rooms on all but the penthouse floor, as well as being used as an accent along the walls of the corridors, with broadloom in the center, creating something of a runner effect that felt high-end and yielded a transition-less entry into the guest rooms.

“The innovation and growth of the LVT category, especially rigid core, continues to drive innovation and increase the range of options and price points suitable in various tiers,” says Drautz.

Though LVT is generally more expensive than the carpet that would be used in guest rooms, hoteliers are taking a longer-term view, believing that a longer lifespan will ultimately yield savings, or at least a break-even. Hotels renovate every seven to nine years, and the material is projected to last two renovation cycles to carpet’s one, says Kaufman.

That being said, many flooring manufacturer believe that the product will style-out before it reaches the end of its useful life and will be replaced as trends and tastes change. Because the hospitality sector hasn’t yet lived through an LVT lifecycle, no one can say with certainty.

All that said, LVT isn’t the solution for every zone. “I’ve seen most brands navigating away from using LVT in the bathrooms due to water issues, but it certainly has its place in the guestroom,” says Stephenson.

And as for cleaning the hard surface material, manufacturers recommend a dry or microfiber mop with a pH-neutral cleanser for spot treatments, says Rahimi-Nolen, adding that early concerns about splash-over from hard to soft flooring aren’t as significant as they once were, in part because “many hotels are going to all LVT for rooms, so there is zero soft surface.”

Broadloom: Broadloom remains an important material for large spaces and corridors of hospitality environments, as well as in guest rooms at the high end of the market. Broadloom’s ability to create large-scale patterns is difficult to replicate with carpet tile, as is the luxurious and textural nature of high-end product.

Sometimes how broadloom is used is changing, however. “We have been seeing more Axminster rugs inset in porcelain or LVT,” reports Daniel Habib, sales representative for Bloomsburg Carpet Industries.

Says Mark Oldfield, senior vice president of the Americas for Brintons, “Today’s designs are more textural as opposed to big medallions. Those have their place in timeless, historical properties, but flamboyant designs and bright colors not so much. Today, we’re seeing more muted palettes and offering more natural products for guest rooms, like our 100% undyed wool collection.”

OW Hospitality’s Darci Sassen notes that she has “heard of brands reverting back to carpet [from LVT], especially in colder climates” but has not actually seen the revision of specifications.

Carpet Tile: Carpet tile has made inroads in hospitality, with its modern aesthetic and appealing replaceability. The material is not generally luxe, as hospitality broadloom often is, but it does have its place due to its practical nature with ease of installation and replacement.

Furthermore, as carpet tile design has improved and the material has become more familiar outside of the corporate sector, hospitality players have become more willing to accept it and add it to their portfolio of go-to flooring solutions.

Area Rugs: “Tufted and Axminster area rugs are rising in demand,” says Drautz, with Kaufman adding, “Rugs really go hand in hand in with the residential aesthetic.” With hard surface proliferating, especially in the guest room, many hoteliers are utilizing area rugs to provide warmth, comfort underfoot, style and texture to guest rooms. Often, in mid-range properties, these are inset around the bed, frequently made of carpet tile. In full-service properties, lobby areas and meeting rooms and locations where, says Duncan, “they will spend more for signature pieces that are expensive and beautiful,” rugs are more likely to be Axminster, Wilton or hand tufted.

Porcelain: Porcelain’s appeal with always endure for hospitality specifications due to its sophisticated and highly varied aesthetics and workhorse nature. Under the stress of rolling bags and luggage carts, porcelain can survive decades and look good doing it. Furthermore, the significant innovations manufacturers have made with format and design have suited the material to even more applications, including tile-over-tile renovations, countertops, walls and exteriors.

While click-together tile is not yet widespread across the industry, Daltile’s introduction of RevoTile indicates that the time may be coming where the material won’t always require such cumbersome and costly installation. While several ceramic players have researched and rolled out such solutions in the past-Dal-Tile included-this effort from the nation’s dominant tile supplier may be the one that changes the tide.

DESIGNING APPEAL
If you consider that the hotel experience is exactly that-an experience-it helps to frame the drive for customization from property to property and location to location. While the iconic and identical look of a Howard Johnson property may once have generated a sense of comfort and familiarity for a weary traveler, today, “cookie-cutter” is a synonym for “uninspired,” and uninspired is a wet blanket on experience.

But there is a balance to strike, of course, because a hotel design must also build loyalty for the brand.

“If you think about,” says Bruski, “every hotel is offering the same service, so design makes them different. Design is a key driver of that brand.”

“When people travel now, they want more for their money, and they want to make sure their hotel stay is amazing and fantastic, so properties need to offer more,” says Oldfield. “Today, we are seeing more boutique and regionally inspired properties that tell a unique story about the environment. A magnolia design for the Ritz in New Orleans, mechanical machinery elements for a hotel in Pittsburgh-we can create those storytelling elements through customization so that a property really speaks. We can really tell a story with carpet.”

“We are seeing more requests for a fusion of visuals like stone and cement combinations,” says Ramini-Nolen. “Decorative accents in combination with large-scale field tiles are also on-trend. Creating designated separations in spaces like lobby entry insets or café/restaurant areas to differentiate the locations is another trend, even if it is not a change in material but on the orientation of the layout or pattern.”

Customization rates for carpet in hospitality are very high, as brands and facilities seek to create a memorable space. In hard surface, customization isn’t as popular, in part because logistics make it challenging and costly. Kaufman notes that a brand may invest in customizing an LVT to be rolled out across its entire portfolio of locations, but the process would likely be too cumbersome for an individual property owner.

As such, for hard surface zones, the addition of an area rug may be a simpler option for customization. Sassen says, “Area rugs can function as part of the art package. They can convey seasonal impressions and can be changed more easily than full broadloom.”

Aesthetics are not only a tool to win hearts and minds but also to increase cash flow. “The key for hospitality in selecting carpet versus LVT is the premium they can get for the room,” says Duncan. “If the aesthetic is upscale and can get $25 more per room, the ROI becomes pretty clear.” If the flooring looks outdated, that could lead to a decrease in demand and decreased RevPar (revenue per available room).

THE MANUFACTURERS
Shaw Contract has what it considers to be a deep and wide portfolio of products for the hospitality market-with the depth speaking to the number of patterns and constructions/formats it offers, and the width pertaining to the broad range of flooring categories, including broadloom, carpet tile, LVT and hardwood.

At BDNY, the company will launch its first-ever Axminster collection. The product is being sourced from a vertically integrated, family-run manufacturer in Turkey that has been weaving broadloom for decades. The Axminster range will have a broad selection of customization options in both construction and color. Shaw Contract has been tiptoeing into the Axminster business this year and already has an installation completed in Las Vegas.

With this expanded portfolio of products, the company believes it will be able to target every tier and zone in the hospitality sector.

One solution that Shaw Contract offers is its LokSeam, a clear polyester polyurethane that joins carpet and resilient products together, eliminating the need for transitions strips. This is often used around the bed in a guest room, where an inset rug and LVT meet.

HMTX supplies the hospitality market with LVT products from its Aspecta brand under the Contours and Elemental collections.

Contours, a multilayer WPC, features four patterns-basketweave, whale bone, large chevron and small chevron-and is suitable for use in spaces requiring a high-design solution, such as lobbies and bar areas.

Elemental, available in either dryback or multilayered, features a range of wood looks and is suitable for rooms, budgetarily and in providing acoustic mitigation.

HMTX’s LVT products are customizable, both in terms of aesthetics and format.

Mohawk’s Durkan is a full-service flooring provider for hospitality clients with solutions for guest rooms, corridors, ballrooms, lobbies and pre-function spaces. The brand offers broadloom, carpet tile, LVT and ceramic for hospitality specification. While 90% of the company’s soft surface specifications are custom, its hard surface offering for hospitality is rarely customized.

Another of Mohawk’s brands, Dal-Tile, is a manufacturer and supplier of porcelain, ceramic, glass, natural stone and countertop products for hospitality specification. The company reports that its click-together RevoTile is a ceramic solution that allows hotels to turn over rooms more quickly than traditional ceramic installations. The company reports that around 30% of its hospitality business is customized, primarily for mid-scale properties with a bit of luxury mixed in. The company reports that it launched several antimicrobial series in 2020 that have sold well. Design-wise, Stephenson reports, “For public space, we are seeing a lot more vibrant colors, patterns, and moving away from greys a bit. We have also seen a big surge in our outdoor sales. We make pavers and outdoor products that have performed very well for rooftop entertainment, courtyards and pools.”

Crossville manufactures and stocks porcelain tile in Crossville, Tennessee and has been able to quickly supply projects with material, eliminating job site delays. All Crossville porcelain tile offers coordinating trim.

The company reports seeing new traction in the hospitality sector with its large-format porcelain panels for renovation, with tile-over-tile applications being utilized in both public spaces, such as lobbies, and rooms. The company has also seen activity in its porcelain countertops with its 12mm porcelain slabs being specified in numerous projects for bathrooms, reception, bars and restaurants.

For back-of-house applications, the company offers Cross-Tread, which provides increased slip resistance.

Crossville offers a number of collections with broad color and format ranges that enable hospitality specifiers to create custom installations, such as its Shades, Color by Numbers and Cursive collections.

Tarkett Hospitality combines Lexmark, Desso and Johnsonite to provide a single destination for flooring solutions. The company has a large product portfolio of soft and hard surface flooring, including machine-tufted broadloom, carpet tile, Axminster, area rugs, LVT, rubber tile and wall base.

As a vertically managed business, Tarkett Hospitality offers numerous customization capabilities, along with over six construction types to tailor solutions to various budgets.

Next month at BDNY, the Tarkett Hospitality team will preview two new offerings: a carpet tile collection and an LVT collection that pairs seamlessly with all Tarkett carpet tile.

Milliken specializes in serving full- and select-service hotels with a carpet tile and LVT offering. The company introduced its Modular Landscapes framework just two months before the pandemic, applying proprietary technology to carpet tile to create an aesthetic appealing for the hospitality segment.

“We are getting a lot of traction and good reception from the owner side,” reports Bruski. “They have experienced a 30% price increase on every finish and construction material, and they want a solution that will save them money, with a longer lifecycle. We can make carpet tile look like broadloom with our in-register printing, and we see 20% less yardage needed with tile than broadloom. Many hotels are struggling with housekeeping, so it’s an easy solution to drop in a tile from attic stock if the floor is soiled.”

Bruski adds that Modular Landscapes is less carbon intensive than broadloom and, furthermore, can be used to create an inset rug that aligns with its Laterals LVT.

The company’s Laterals is designed and engineered for guest rooms as a single-step acoustical solution with built-in acoustic layers that reduce through-floor noise and in-room noise by 50% using Milliken’s FlexFoam Sound LVT.

Bloomsburg Carpet is one of the few Axminster producers in the U.S. and, as such, saw good demand amid the pandemic as global supply chains were crimped. Due to these challenges, the company also noticed more elasticity in budgets and a trend toward higher-end product. The company manufacturers its products in Bloomsburg, Pennsylvania.

In addition to Axminster, the company produces Wilton products for custom jobs that require a bulletproof construction, such as Radio City Music Hall with its high level of foot traffic and need to maintain a highly polished appearance.

While 90% of the company’s hospitality sales are custom, Bloomsburg does maintain a running line of Axminster SKUs for lower yardage jobs.

Brintons’ U.S. business is dominated by hotels, cruise ships and casinos, so amid the pandemic, it was tough going for a bit. However, as a global business based in the U.K., the company found itself buoyed by activity in other countries, including Europe and Australia, when U.S. business was sluggish.

Brintons produces its Axminster broadloom in three factories: one in Portugal, built 35 years ago; one in India, built 20 years ago; and one in Poland, acquired five years ago. British wool is shipped to all three operations, which have a varying mix of production capabilities. The Polish facility also produces Wilton products, which are 100% wool cut-and-loop. Brintons has seen an uptick in these products being used in luxury guest rooms. In Axminster, the company has the capability to create large zones-like ballrooms-in a single pattern repeat.

Following the transition to hard surface in some areas of hospitality, Brintons has noted more demand for rugs in woven Axminster and Wilton than ever before. And Brintons has launched a curated collection of SPC products, called Arden Trace, to function as a one-stop-shop for hospitality flooring solutions.

OW Hospitality custom designs woven Axminster carpet, hand-tufted broadloom and area rugs for public hospitality zones, including ballrooms, pre-function spaces, meeting rooms, corridors, lobbies and convention centers, as well as area rugs for guest rooms. Clients select up to 16 colors from over 450 pom box colors, which include high-luster nylon and barber poles; colors are dyed for each individual project.

OW Hospitality’s clients are mid-range to luxury players, and the company notes that it has seen increased sales of custom Axminster carpet tile, typically used in Native American gaming spaces for ease of access on raised floors.

Emser offers hard surface products for every scale of hotel. Its offerings include porcelain, ceramic, stone, quartz, LVP and supplementary products. The company has a high focus on porcelain and natural stone offerings for guest room entries and bathrooms, as well as public and amenity spaces.

Copyright 2022 Floor Focus 

Related Topics:HMTX, Mohawk Industries, Crossville, Shaw Industries Group, Inc., Daltile, Tarkett