The number of mixed-use or “integrated” developments is thankfully increasing. And the role of hotels within them is changing too.
Drive-in/drive-out, stand-alone hotels are on the way out. In their place: curated, “layered” environments where the hotel brand is woven into a broader mix that includes retail, entertainment, health/wellness and offices (including co-working).
Hotels in this context can be twinned with branded residences – allowing long-, as well as short-term, stays.
Hotel-driven integrated developments deliver convenience as well as comprehensive lifestyle choices. Examples include District 8 in Jakarta, Bluewaters Island in Dubai and Soi Langsuan in Bangkok.
Boutique hotels, or brands which are slightly more off-beat, are well suited to these experiential, self-contained ecosystems – such as 25 Hours Hotels’ The Oddbird in Jakarta, and The Banyan Tree/Delano pairing in Dubai.
From an investment perspective, mixed-use developments create diversified revenue streams. While stand-alone hotels are subject to seasonality and economic cycles, integrating them with offices and F&B-led retail increases their resilience and the profitability of all components.
The developer appeal of hotel-driven mixed-use real estate therefore lies in a more diversified customer base with longer visits, shared infrastructure and operating costs, and – usually – a higher yield per square foot.
The end-user appeal is in the development’s increased sense of purpose, connectedness, recognition of the “local”, and overall “destination” offering.
