5 Minutes With...Daniel Kitch, Choice Hotels

Daniel Kitch is the General Manager for Development for Choice Hotels Asia-Pac. He is responsible for the ongoing progress of the business’ growth strategy, leading his development team on new property recruitment, and retaining, repositioning and rebranding existing properties as required. Kitch's years of experience in the hotel industry includes a number of roles, including  a development role at Quest Serviced Apartments.

Q. How does hotel development differ from the rest of the industry?
In certain areas, hotel development has outperformed other commercial property assets, providing a viable solution in alternative developments. Strong underpinning yield and capital growth from hotel assets further compliments this strategy amongst developers.

Industry demand is still prevalent in certain areas including CBDs, inner suburbs and regional centres. Drawing from this demand, we can see opportunities for some developers to shift their focus from a traditional, off-the-plan, apartment that requires pre-sell, to developing hotels or serviced apartments as an alternative option.
Q. What is Choice Hotels’ direction in hotel development? What are you looking for?
There are three key elements that Choice Hotels looks for in new hotels: location, engaged hotel owners/developers, and property standards. The adage ‘location, location, location’ couldn’t be more true, as proximity to demand generators such as business/corporate hubs, tourist attractions, industrial parks, universities, hospitals, airports, restaurants and bars are all important factors.

Secondly, as our franchisees are extremely important to the success of Choice Hotels, we look for engaged hotel owners willing to work with a proven system to ultimately improve the performance of their hotel. To us, it’s a collaborative approach and it’s mutual.

And lastly, property standards and facilities are imperative, as we need to ensure that these features align with Choice Hotels’ brand positioning.
Q. What do you think the future holds for hotel development?
As a franchisor, we are witnessing common themes amongst the hotel development industry. This includes the following observations:

• The changing development landscape across Australia, including activity centres, whereby certain councils are more considerate of mixed-use, development/high density living, assists short stay accommodation as either hotel or serviced apartments. This allows developers to minimise their risk whilst enhancing the feasibility of the development.

• We continue to see serviced apartment developments occur across Australia and New Zealand.

• Conversion of existing “B Grade” office buildings into hotels or serviced apartments.

Q. What are some of the key trends you’ve noticed in hotel development?
I anticipate modular construction becoming increasingly popular, and this method of construction will set the trend for new hotel builds compared to the traditional model, as developers are becoming more and more confident with the concept.

Mixed-use developments are an emerging trend, as developers are moving away from limited real estate products to embrace new platforms, with great flexibility to attract the best tenant or management companies.

We, as the franchisor, have to be at the forefront of market trends whether it be in hotel development, revenue and distribution, marketing initiatives, evolving loyalty programmes, assisting our franchisees to drive accommodation reservations or increasing levels of overall business performance.

As a pure franchising company, Choice Hotels Asia-Pac is always looking to work with hotel owners or managers who are committed to providing outstanding service and value to their guests, while reaping the benefits of a global brand.
Q. Where do you think the ‘hot spots’ are for Australian hotel development?
Capital cities are definitely a major focus across Australia and New Zealand, as we see a huge demand from our corporate market; which makes up around 70% of our business mix.
Q. Do you have any advice that the industry could draw inspiration from?
Inspiration can be driven from consumer demand for good quality hotel developments in CBD, suburban and regional areas. The level of demand in Australia and New Zealand is high and will remain high for a significant amount of time, due to increased tourism (emerging middle class Asian market), corporate business, leisure, government, investment in events, increased international flights and infrastructure projects.

Continued local, state and federal government support for infrastructural growth of hotel developments is important for sustained economic and tourism success.