Former Holiday Inn CEO Tapped To Lead Olive Tree Hotels & Resorts
Olive Tree intends to prioritize reconfiguring hotel properties to accommodate the needs of a growing mobile workforce.
A former Holiday Inn chief executive has been tapped to lead the newly-launched Olive Tree Hotels & Resorts, an initiative of New York-based Olive Tree Holdings that will focus on acquiring and strategically repositioning US hotel assets.
Hospitality industry veteran Ken Hamlet will serve as Chief Executive Officer of the new venture, which is expected to deploy $500 million of equity capital over the next three years in select-service hotels and opportunistic full-service assets.
The firm is entering the sector at a particularly interesting time for investors in the space, as pandemic-related challenges have reshaped consumer demand and dispersed working professionals away from traditionally dense urban cores. Olive Tree intends to prioritize reconfiguring hotel properties to accommodate the needs of a growing mobile workforce through technological improvements, attractive workspaces, and energy-efficiency upgrades, the firm said, and will draw on data-driven analyses of market opportunities in tertiary and secondary cities.
“The hospitality sector, in tandem with the global tourism industry, is poised for an incredible rebound. In the months and years ahead, we believe there exists a tremendous opportunity in the select-service category to create value and win market share,” Hamlet said in a statement.
Since its founding, Olive Tree Holdings has built a portfolio of over $1 billion.
Recent research from Real Capital Analytics shows that some sectors of the hotel industry are recovering more quickly than others, as the sales market fell only 22% for economy branded, investor-preferred hotels, showing a clear investor preference. Economy-branded hotels have also gobbled up market share, with investment in the subsector constituting 5% of the market between 2015 and 2019 and climbing to 16% in 2020. About 30% percent of total hotel investment went to midscale hotels. Investors are looking to economy hotels as a more stable income stream amidst the COVID-19 economic recovery, as these properties tend to be occupied by leisure travelers who are expected to return to the road sooner than business travelers.