The Market

Straightline offers its services in the hospitality marketplace - a complex industry which is being "...buffeted by the winds of change".

Hotels, resorts, spas, timesharing, fractionals, and recreational real estate are the physical assets which play host to the traveling public in America and throughout the world. These buildings are not passive investments which can be held over time without active involvement of owners. These facilities provide the background against which the hospitality experience is played out. Hospitality buildings and structures generally have little intrinsic value. The value is in the combination of operational expertise and hard assets.

• The hotelier knows that it is his skill in operating the hotel which will result in its success or failure.
• The spa manager appreciates that it is the aura he creates, not the technical delivery of a spa treatment or the lavishness of the spa facilities which will result in market acceptance.
• The timeshare or fractional project director knows that he is selling a dream, a vision of future vacations in his resort or those with which his is affiliated. His buildings - their design and functionality - are in truth very important. Location, too, is critical. But, most important to the project's financial success is the marketing and selling talents of its professional staff.

Hospitality real estate is not always appreciated for being a hybrid asset, being both physical facility and operating business.

The times in which we live are anything but stable. Major disruptions have occurred in the hotel and lodging industry in recent years. Macro-economic forces have buffeted revenues. Increased regulation has mandated substantial change in the way employers treat and compensate employees. Social media has challenged traditional marketing paradigms. Competition from short-term residential intermediaries, such as AirBnb, has increased room supply without adding market amenities. Brands have proliferated. Investors, lenders, operators and other stakeholders having been seeking consistency so as to reduce risk and moderate stress. In recent years this effort has been challenged.

Worldwide hospitality assets represent trillions of dollars in invested capital. This capital oftentime fails to deliver financial returns which are commensurate with the operating risks entailed in this hybrid asset type. Straightline is therefore frequently engaged at strategic or practical levels to review, suggest, and implement alternative frameworks for value creation or problem correction.

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