Hospitality: Three CRE Questions with R.D. Olson’s Bill Wilhelm

By Dennis Kaiser

R.D. Olson Construction has been involved in the construction of hospitality properties for decades. The Irvine, CA-based firm’s most recent hotel projects include such properties as Paséa Hotel & Spa in Huntington Beach, CA, the Irvine Spectrum Marriott in Irvine, CA, Residence Inn by Marriott Silicon Valley in San Carlos, CA, Lido House Hotel resort in Newport Beach, CA and a recently-proposed hotel in Hollywood, undergoing planning.

R.D. Olson Construction president Bill Wilhelm shared his insights about what it takes to develop hotels in today’s CRE environment.

Q. What changes have you seen in trends in hotel construction over the past five years? What changes do you expect to see over the next five years?

A. Over the past five years, hospitality design and property usage has focused on the guest experience more than ever before. Properties examine amenities, finishes and other choices closely to ensure that they will promote and encourage a comfortable and memorable stay for guests and positively impact the surrounding community. Individual guest rooms have continued to evolve, providing more of the comforts of home (e.g., in-room workstations, streaming Netflix) while public areas look to encourage interaction, creating a more social experience.

Looking forward, technology has only just begun to be fully-integrated throughout most hospitality properties. This advancement and integration will continue as the younger generation (e.g., Millennials and Gen Z) begin to demand and look for those conveniences, creating more opportunities for interaction and connection that will boost the guest experience.

Q. When constructing a property that will have a significant impact on the surrounding community, such as Paséa Hotel & Spa in Huntington Beach, CA, what are considerations that construction companies and their developer partners must take?

A. When constructing a property, it’s critically important to fully understand the impact it will have to surrounding communities and create plans that will enable us to be considerate of neighbors by minimizing direct impact to their environment. For example, it’s important to understand traffic flow patterns so that material deliveries and trucking impacts can be managed and scheduled during low traffic times.

Other items you must consider include maintaining and managing dirt, trash, and dust, and coordinating specific work hours that are in line with neighborhood norms. If a project requires weekend or early morning work, early and frequent communication with the community is imperative.

Q. What is your outlook for the hospitality industry? How do you expect different types of properties (e.g., full-service, select-service) to perform over the next several years and what does this mean for the industry?

A. The hospitality industry has always been responsive to the economics of geographies and regions, which are largely driven by business and leisure travelers and their respective needs. These factors will continue to drive the success of the various hospitality property types.

Additionally, the flag hotel brands are doing a great job understanding and reading the markets trends, which has helped them with their forecasts and in managing and pre-empting saturation concerns. As a result, over the next several years, the industry will continue to see satisfactory growth and stabilization patterns in both full service and select service properties.