The only difference is the upward trends experts have seen in general in the hospitality industry. With the new year, investors in the hospitality marketplace are paying close attention to the growth and percentage increases over previous years, and are exploring new investment opportunities.
As economic progress continues to be made across Central Pennsylvania — along with strong efforts of many to improve the Harrisburg market — we are seeing ample opportunities developing for local investors and those from outside our region to grow their portfolios.
I encourage my investors to invest in the capital. Investing in Harrisburg is a great opportunity to start a business at a lower cost, develop and grow your unique business idea and contribute to the city.
Many things can make or break a good deal, but there are two primary factors to consider when investing in the restaurant or hotel industry.
One of the most influential factors to completing a smart and successful deal is the strength of your network. This is due to the number and variety of professionals involved in completing a successful transaction.
A broker with a strong network will know the right contractors, attorneys, financial institutions, inspectors, engineers, zoning officers and other government professionals. However, the ability to move the transaction forward will require maintaining healthy and friendly relationships with those individuals, and knowing how to interact within each culture or community.
This is what makes the purchasing and selling experience much more pleasant for both the buyer and seller and will yield a better deal in the end. If the broker’s network relationships are weak or lack experience in the restaurant or hotel brokerage industry, this can lead to tension, mistakes, delays and missed opportunities. Good relationships mean a higher chance of a smooth process.
A good restaurant or lodging investment opportunity is highly dependent on location. You’ve heard it before and it still holds true, location is key. My experience in the industry has revealed that activity, population and safety all contribute to a positive view for the future of a property.
It’s always important to know your market. Are others building and buying? Is activity on the rise? Maybe there is a great value in what is available. If so, it may be the right time to invest.
The National Restaurant Association reported that, driven by an improving economy, restaurant industry sales were expected to hit a record high of $709.2 billion in 2015. The American Hotel & Lodging Association said hotels generated $141.5 billion in business travel tax revenue, which was up $6.5 billion from last year.
These positive gains are expected to continue through 2020. The American hospitality industry is healthy and at a good stage for those experienced buyer-owners to invest and grow their existing portfolio.
With the transactions I have seen and have been part of, this should provide the Central Pennsylvania restaurant and hotel industry with a more prosperous 2016.
Bo Mangam is a commercial real estate agent at Landmark Commercial Realty Inc.