Real estate indicators from HFF Director Alan Suzuki in HFF’s Boston office.
Let’s face it: No one likes to go to the hospital, and, for the rarest and most serious medical conditions, it is becoming commonplace for families to travel great lengths for the best medical care. Unlike a lot of hotel guests, they are not traveling for vacation; they are traveling because they need the specialized help that only the best hospitals can provide. In times like these, the last thought crossing a person’s mind is where they should stay. Hotels near medical centers can provide a much-needed respite for patients and caretakers during a difficult period. But are hotels near medical centers an attractive opportunity for industry developers?
What if there was a clean, comfortable bed, a short walk from the hospital so that a loved one can catch a few minutes of sleep? Caretakers want to be as close to their loved ones as possible but also need a comfortable place to sleep, particularly if they are staying for a long period of time. It's beneficial for caretakers to escape for a few hours from the cold, institutional-feeling hospital, to a warm and “homey” environment, and that can be found in a hotel. Studies have shown that ample daylight, warm materials and colors serve as a comforting environment during a difficult period and can actually improve health outcomes for both patients and caretakers by reducing stress and anxiety.
What if there was a thoughtful “grab-and-go” food and beverage concept that offered rotating quick service food options with healthy alternatives that would be available at all hours of the day? Most caretakers are coming and going from the hospital at all hours and would welcome quick and convenient “non-hospital food” options. Some of these hotels offer large, comfortable lobby areas with communal seating for relaxation and dining to encourage interaction, as patients and caretakers may want to be able to meet others in similar situations and discuss treatment options and best practices.
A dedicated area where younger siblings or children of patients as well as children who are patients themselves can play video games or board games, escape the hospital and interact with other children would be a needed and positive distraction. Additionally, a suite-style hotel room with a separate living room area, bedroom and small kitchenette could help families feel comfortable for an extended period of time. Treatments can often take several weeks or months, so visitors often yearn for a hotel room that feels like home. What if there was a large proportion of rooms that were truly handicap accessible and catered to the patient? Even after the patient’s hospital stay is up, patients are often encouraged to stay near the hospital for a short period of time in case of an emergency. A truly handicap accessible room (roll-in showers, handle bars, larger-sized bathrooms, lower counters, etc...) will be critical during the healing period.
So if hotel developers build it, will they come and will the hotel be successful? Let’s do some quick math: At Johns Hopkins Medicine, which is headquartered in Baltimore, Maryland, and one of the leading health care systems in the United States, the hospitals collectively accommodate more than 2.8 million outpatient encounters per year and handle more than 115,000 inpatient admissions annually. Additionally, a significant portion of those visitors are coming from outside of close driving distance, meaning that they are going to need overnight accommodations. Even if a small percentage of those inpatient and outpatient encounters require overnight accommodations, that’s a tremendous amount of hotel room nights.
Historically, projects near a few medical centers have led the way in this regard and proved successful, including the hotels that surround the Cleveland Clinic and Texas Medical Center in Houston, for example. Developers are catching on again, and many hotel facilities are under construction or being planned near medical centers throughout the country. At Johns Hopkins Medicine, for example, a brand new 194-room extended-stay Residence Inn by Marriott hotel is under construction and will be open in the near future.
In conclusion, we need more thoughtfully-designed hotels near medical centers for the targeted audience, which is a win-win for both consumers and developers.
Alan Suzuki is a director in HFF’s Boston office with more than 13 years of experience in the hospitality industry. He is primarily responsible for institutional-grade hotel and resort investment sales in New England and across North America.
Mr. Suzuki began his hospitality career working in operations as a front desk manager at the Four Seasons Hotels & Resorts in Jackson Hole, Wyoming, and in Washington, D.C. In 2005, Mr. Suzuki moved to Boston to work at Pinnacle Advisory Group, one of the top hotel consulting companies in the northeast. During the next eight years, he worked on more than 175 consulting assignments, including market studies, appraisals, acquisition due diligence, brand impact studies and litigation support. Mr. Suzuki has worked in hotel brokerage since 2009 and has worked on the marketing of a variety of hotels, including the Marriott Boston Burlington, Ritz-Carlton Georgetown D.C., Marriott Burbank and the aloft & element Boston Lexington.
HFF is one of the leading capital markets intermediaries in the United States for hotel and resort assets, having closed more than $25.8 billion in over 810 transactions since 1998. We have a national team of approximately 70 hotel specialists who are experts in providing construction, bridge and permanent debt alternatives. Additionally, HFF provides equity placement options, including joint ventures, participating debt and mezzanine financing structures, preferred equity, participating mortgage, traditional and investment sale transactions.