For many, college is one of the best time periods of life. In between football game tailgates, experimental art shows, and lectures and classes designed to challenge the mind, college is a time for self-reflection, exploration and discovering one’s identity and authentic self. For the hospitality industry, college towns represent another kind of opportunity: predictable, stable markets regardless of the economic cycle with guests who are guaranteed to return time and time again for at least the next four years—and in many cases, even longer.
It’s no wonder, then, that hotel companies are turning to collegiate markets—whether through partnerships with universities, brands designed to appeal to this market segment, or traditional hotel brands situated in just the right location.
Tim Ryan, chief investment officer, Graduate Hotels, which has more than 20 college-oriented properties in university markets, laid out the appeal: “No matter how, or when, the broader economy shifts, I think we’ll continue to see major universities bring relative steadiness to their local economies, which is good for our business.”
Sara Masterson, president, Olympia Hotel Management, a division of The Olympia Companies, which both third-party manages hotels for universities and develops, owns and manages its own assets proximate to college campuses, said, “As a developer/owner, we’re always looking for markets that are somewhat resistant to changes in outside economic conditions, and campus markets certainly fit that bill. As a manager, we really love college markets because we get to operate these unique, bespoke properties that are culturally aligned with the campuses; you can’t always pick up these properties and plunk them down someplace else because their sense of place is so closely tied to the campuses in which they exist.”
Michael Cady, VP of marketing for Charlestowne Hotels, which also manages hotel properties in collegiate markets, some of which are owned by the universities, added that university-owned hotels have an added benefit for third-party operators: job security. “We deal with owners trying to get RevPAR up and turn it in two years, and then usually the buyer has a [management]company and we’re out,” he noted. “With universities, it’s a legacy play. We could have this contract for 20 or 30 years if we play our cards right.”
“From a revenue management perspective, you have built-in demand patterns that are pretty black and white,” added Johnathan Capps, VP of revenue, Charlestowne Hotels.
Capps noted that these markets typically have a mix of leisure and corporate, in addition to the university business. “One thing that’s interesting and a little underrated is social business, especially weddings,” he said, pointing to data from Facebook analysts that found that 28% of married couples attended the same college. “The wedding business, the return visits—the sports games they want to go to and relive what many call the best years of their life—it’s a little bit baked in, what you call university leisure, which makes for some good bumps and opportunities.”
And, it’s not just the university students and alumni attracted to collegiate markets. Mark Ricketts, president/COO, McNeill Hotel Company, which has a number of branded hotels in collegiate markets in its portfolio, noted that university towns attract two other big groups: retirees and businesses.
“You’re starting to find a lot of retirees coming to these college markets because there’s a lot to do,” he said. “If they’re living in smaller homes, when family comes to visit, they need a place to stay.”
As for businesses, Ricketts pointed to Manhattan, KS. “When we were looking for sites there, several companies were relocating to be close to the university,” he said, noting that the National Bio and Agro-Defense Facility is relocating there because of Kansas State University’s College of Agriculture. This, in turn, strengthens the market for hotels because it’s yet another demand generator.
Hans van der Reijden, founder & CEO, Ithaka Hospitality Partners, which manages The Hotel at Auburn University for the institution, noted that there are a lot of opportunities for third-party operators who understand college markets, as these properties can’t be run like any other hotel in town. “Having run a university hotel for 15 years, we make sure it serves as the front door to the institution,” he said. “Hotels at a university campus tend to be the first point of contact for incoming freshman, parents doing college tours, speakers, professors who are being recruited, and if you don’t have that as a priority, then it doesn’t serve as that first impression that the university wants the hotel to be.”
Often, the goals of these universities isn’t necessarily profitability—though that’s certainly a benefit—but to serve as an introduction to newcomers; to serve as a place for alumni to come home to; to foster the relationship between the university and the community it’s located in; to bolster scholarships for university students; and, for those institutions with hospitality management programs, to enable and enrich the educational experience.
Masterson said, “Universities like the hotels to be self-sustaining, they want to put away enough capital reserves to maintain a high-quality asset that’s consistent with the quality of their own academic identities, but they’re not often looking for them to diversify their cash portfolio. For those colleges and universities, it’s often about creating an amenity.”
Bob Shea, VP for business, finance and technology at Elon University, which works with Charlestowne Hotels, noted, “As an on-campus hotel, The Inn at Elon is a key resource for the community that allows visitors to campus to see Elon’s educational model at work and better understand what makes Elon distinct. The inn is a place to welcome alumni, parents and friends back to campus while serving other visitors to the university, including speakers, prospective students and their families, business recruiters and travelers.”
“[Collegiate hotels] definitely serve as a sales opportunity for the school to showcase their institution to prospective students,” said Gavin Philipp, VP of operations, Charlestowne Hotels. “Using the example of The Sewanee Inn [at The University of The South in Sewanee, TN], it really becomes the living room of the school where people gather at the bar, the restaurants and really make it part of the school experience.”
And, a successful hotel will become such a part of the experience that alumni will want to experience it again and again. Cady stressed that satisfied alumni are critical. “They’re always a long-term game, and in the hotel management world, we love that,” he said.
The town and gown relationship must also be considered. “Community members may have nothing to do with the campus on a daily basis, but here’s a place where they can feel connected to this large institution in their backyard,” Masterson said, noting that F&B is usually a huge focus for these hotels. “These community members may never see inside a guestroom, but they certainly want to engage with F&B.”
Many times, the university is integral to the town. Cady noted, “At some of the universities we work with, the towns are built around the college and sometimes need that economic boost made by the college. So, a major goal is how they can help their local community. How can they revitalize main street? How can they create more jobs? When you’re in Waterville, ME, where we have a hotel we’re building at Colby College, or Hamilton, NY, which is the Colgate Inn, those main streets are vital and the university puts a major focus on them to help the overall community, which helps the overall brand.”
Brian Clark, VP of planning, Colby College, elaborated on that goal. “The Lockwood Hotel is part of a larger strategy and set of investments by Colby College on Main Street intended to spur economic activity throughout the City of Waterville,” he said. “When the Lockwood opens in October, it will be the only hotel in downtown Waterville and will play a key role in attracting visitors to stay in the heart of the city.”
The Lockwood is expected to have more than 60 employees when it opens, and construction activity is supporting nearly 250 workers, with $12 million in construction costs directed to local contractors.
He continued, “Importantly, Colby’s investments—which will total more than $80 million—have attracted significant private investment throughout downtown, and created a dynamic momentum and energy that the area hasn’t experienced for the better part of 50 years… New businesses are opening, new jobs are coming to the city, and there’s been a meaningful increase in the area’s population and labor force, real estate activity and property values, and the tax base.”
In addition to the town, the hotels can be a boon to scholarship students, too.
“The Inn at Elon serves as an investment in the future of our students, with profits from its operation being used to fund student scholarships,” Shea said. “We anticipate the inn being a vital contributor to supporting scholarships for generations of students.”
Masterson said Rollins College has a similar goal with The Alfond Inn. “It allows people to participate in higher education regardless of whether they’re coming in for a glass of wine in the evening, they’re an overnight guest, or they’re hosting a meeting—they are supporting the academic mission,” she said.
University-owned hotels can also support hospitality programs. Van der Reijden noted that Auburn University’s hospitality program has long been a part of The Hotel at Auburn University’s mission. It was so successful that Ithaka has partnered with the university for the Tony & Libba Rane Culinary Science Center, which is expected to open in the fall of 2022. Among other components, the center will have a 32-room boutique hotel and a 36-seat restaurant. Every year, the center will partner with a name chef, who will place one of his or her sous chefs or chefs du cuisine in that restaurant for one year.
“The name chef will be there three times a year to do a demo, a fundraiser or a class, or to work with donors on a special event. Over four years, the students will be exposed to four well-known chefs who they can put on their resume, and that speaks volumes,” he said.
With regard to the hotel component, he noted that since it’s only 32 rooms, “we can do a luxury seamless check-in, where the student gets to learn how to welcome the guest, take them up, give them an orientation of the library and lounge, and room the guest. You’re taking four jobs—the doorman, bellman, front-desk agent and concierge—and combining them into one, which allows the student to have a far more rewarding and intense learning experience.”
Because learning was the driver, the center—which is being designed by Cooper Carry—had to be designed differently. “A restaurant designer will try to get as many seats as possible in a restaurant,” he said, “but we want to limit the amount of seats because the learning experience is central.”
Educating the educator
One challenge with university-owned hotels is that the owner does not live in the hospitality world—so it’s important to be a true partner.
“They’re from the academic world and may be new to hotels,” said Capps. “If we’re going to charge $500 for a football weekend or graduation, we have to be upfront with that and communicate.”
Education is also important in the development process, too. David Bois, principal, Arrowstreet, which has designed hotels for universities, noted, “When you do a hotel for Sheraton or Hyatt, they know what they’re looking for. Hopefully, you get flexibility in your design, but they have a support network and professionals who do just that. When you do work for colleges, this is really a tertiary part of their business. It’s an amenity more than it is a business driver.”
This means that they’re not as knowledgeable about things that come naturally to those in the industry. “Part of that is the process of working with them to educate them about standards they need to meet and where budgets need to be in order to bring it to the level of quality that they’re looking for,” he said.
While university-owned hotels is one piece of the segment, the industry has also seen the rise of brands like Study Hotels and Graduate Hotels.
When Hotel Business spoke with David Rochefort, Graduate Hotels’ president, last fall about the company’s growth, he described his outlook for Graduate: “My ultimate vision is to develop the greatest service culture that is built on creating emotionally charged experiences for our guests through the art of storytelling. Every guest that walks through our doors should be taken back to the carefree moments of college, whether they went to university located within the community they’re visiting or not.”
Paul McGowan, founder/CEO of Study Hotels, which opened its first property, The Study at Yale, in 2008, saw the opportunity in these markets right away. “We saw a void in the collegiate hotel realm of high-quality accommodations at a number of schools,” he said. “We went about the process of softly branding the hotel, thinking about what kind of experience people are looking for in a university environment.”
Now, Study, which purchases land directly from universities, has an additional property in Philly’s University City, with two more planned to open at the University of Chicago and Johns Hopkins in 2020 and 2021. “This is not about building as many as we can,” he said. “If we had chosen to do that, we would have started that process 10 years ago. This is more about a deliberate long-term priority to become an integral part of the school’s culture, which results in significant value to both the university and to us.”
While Study and Graduate specifically look for collegiate locations, more traditional hotel brands can thrive in these markets, too. Ricketts noted that McNeill has opened branded hotels in collegiate markets like Waco, TX; Morgantown, WV; and Auburn, AL.
The company often aligns with the Southeastern Conference (SEC)—“Those football fans travel en masse whether it’s the home team or the visiting team,” he noted—but it also looks for other factors, such as whether enrollment is increasing.
“There’s typically a lot of hospitals in those markets. We like that it’s not just one big demand generator and if that closes or moves, we’re up a creek,” he said.
McNeill tends to develop extended-stay brands in these markets, such as Residence Inn, TownePlace, Home2 Suites and Homewood. Ricketts noted that many guests in these markets like the extra space that extended-stay offers.
Regardless of whether the hotel is university-owned, a collegiate brand or a traditional brand, one thing is certain: Design is key.
“Like any project, you want to start with understanding the goals,” Bois said.
For instance, Harvard University wanted Harvard Square Hotel to provide a place for continuing education students. “Those people are there for a week-plus: Their focus is really on the education,” he said. “Like any hotel room, you have to build that in, but here, it’s really paramount. It’s the desk, the storage, the ability to be in your room for an extended length of time in the evening and do work comfortably.”
Since Harvard Square is also a popular destination for non-university affiliated guests, it was important for the design to be inclusive. Arrowstreet incorporation the map of Cambridge into the lobby, hallways, and hotel rooms, each in their own unique way.
“You don’t want to get cliché about the design,” he said. “You want to be very specific to the location because when you travel, you want to feel like it’s unique, but branding it with the Harvard H everywhere or even the crimson [wouldn’t work]; they wanted it to feel like a place where if you showed up on a leisure trip, not knowing it was Harvard’s hotel when you booked it, you wouldn’t know when you left.”
Colby College’s Clark added, “It was important to Colby that the Lockwood Hotel, which sits 2.5 miles from campus, not be heavily branded with Colby’s identity. Our guests will come to Waterville not just because of Colby but also because they are drawn to the city’s rich art and cultural institutions, great local food, and access to Central Maine’s outdoor recreational amenities.”
The college worked with Charlestowne Hotels and branding firm On Ideas to develop an identity for the hotel that is deeply connected to Maine, with Colby subtly integrated. “For example, the Lockwood will feature art from Maine artists such as Bernard Langlais, Angela Adams and Tanya Hollander that has been curated by the director of the Colby College Museum of Art, and the restaurant, Front/Main, will feature local foods that are often produced or raised by Colby alums,” he said. “The hotel design is deliberately contemporary and speaks to reinvention and rebirth, while still being connected to Main Street through the use of materials frequently found elsewhere on the street (e.g., limestone). The Lockwood name comes from the Lockwood Mills, Waterville’s first textile mill, located just south of the hotel, that was responsible for establishing Waterville as a center of manufacturing in the middle part of the 19th century, forever changing the city’s trajectory. While the mills have since closed and Waterville is no longer a center of manufacturing, it is undergoing a transformation today and we thought it was powerful to make that connection of present and past.”
Masterson echoed this point. “Even though you are located on campus or proximate to a campus, you still need to cast a wide audience net,” she said. “One mistake you could make is speaking to too defined an audience so that it inadvertently feels exclusionary to the broader traveling audience.”
When Olympia approaches design for these projects, she said, “We try to identify what is it that creates a sense of space or place in these particular markets. For example, we own and manage with Smart Hotels the Sophy Hyde Park, which is located very close to the University of Chicago. We really tried to identify how to make this a uniquely Hyde Park property and a uniquely University of Chicago property.
“We determined early in the interior design process and the branding process—and those are mutually informing—that we were going to talk about innovation in a way that touches a lot of academic disciplines,” she continued. “That allows for guests to engage with that property in a way that suits them best; some people are really interested in music and the Mahalia Jackson gospel singer from Hyde Park, so that really resonates with them; other people gravitate more toward sciences or literature, so those elements exist in that property but the personalities of the spaces are defined by Hyde Park and the university.”
For hotels located on campus directly, it’s often important to blend in. “Architecturally, the hotels the universities are designing are befitting of the type of structures that already exist on the campus,” Philipp said. “From a design or programming perspective, it’s a little less literal; it’s subtle nods and smaller things we do operationally that tie it to the school.”
Guests can love subtle touches. Ricketts pointed to McNeill’s Homewood Suites in Athens, GA, home of the University of Georgia Bulldogs. “We’ve got a picture of a bulldog in a tuxedo in the bathroom. The hooks in the rooms are little bulldog faces,” he said. “We have a pool table, and the eight ball had a bulldog mascot, and the GM told me they keep running out because people are taking it.”
Ricketts added that it’s important to be flexible with design in these markets. “In Auburn, Waco, and Athens where the climate is a little warmer, we try to do bigger outdoor seating experience areas,” he said. “We put a bar in the Homewood Suites in Athens because we have a lot of fans who want to partake, and the brands have been very open to working with us and creating a customized package, which is great because it’s not just cookie-cutter.”
For his part, McGowan said, “We were certainly mindful of the fact that whatever we did had to hold up to discerning tastes as it relates to people who attended and are frequently visiting [the universities]. We really put a lot of energy into ensuring every aspect was thoughtful—that happens to be the way we approach everything, but that was really important.”
Straddling that line of softly branding while not overpowering the university identity is an art. “We’re mindful to get an understanding of what the personality of the school is and making sure we reflect that in a number of ways, not being so brand identified by our look,” he said. “We take a few attributes forward—our leather chair and ottoman is something we have in every guestroom, as well as really great reading lamps, a great shower experience, great bedding, an abundance of natural light, wide work surfaces and desks in the guestrooms. Then, we use our living room space to reflect more of the cultural character.”
Ithaka’s van der Reijden added: “We want every hotel to have an incredible sense of place, to have soul, and to have the DNA of the university. We may not have an orange and blue lobby, the colors of Auburn University, but there are subtle touches of the Auburn eagle. We’re doing a rooms renovation right now where every room has an entire wall covered in a map that represents the decades of the floor. On the second floor, it’s a map from the 1920s, up to the sixth floor with the 1960s. If you don’t have an affiliation with the university, you come here for business, you look and say, ‘That’s a cool old map on the wall.’ But when you are an alum of the university, you’re going to find out where your fraternity house was, where the library was, etc.”
Of course, the identity goes well beyond design. “There’s a tradition in Auburn where after a win, everyone goes to a place called Toomer’s Corner and rolls the trees [with toilet paper],” van der Reijden said. “Every guest for a home game [gets]two rolls of toilet paper, one in orange wrapping paper and one in blue, to take to the corner and encourage this part of school spirit to be executed.”
McGowan added, “With the university community, there are many ways we make these connections: the active art galleries in our hotels that showcase works of students and even local art associations; showcasing authors at university book signings; public radio broadcasts in the lobby; sponsoring athletics and conducting certain celebratory events around athletic success; offering tickets to events; or collaborating with the theater and other institutional interests in the community.
“We also do tremendous outreach into the community in terms of initial hiring,” he added. “A high percentage of associates live within five miles of our hotel… We also try to be] good advocates of the university experience. One thing we’ve done from day one: All front-desk associates take the tour of campus, become campus ambassadors, so it’s almost like a living concierge at each space.”
Given the unique demands of collegiate markets—including a demand generator that often means more direct bookings—the strategy for managing these hotels can be very different, particularly when it comes to revenue management, as well as sales and marketing.
“Take a large institution like the University of Chicago,” Masterson said. “Affiliated or direct business is certainly a primary demand driver for our two hotels in that marketplace, but those institutions don’t work as one big company. Every department behaves and acts on its own. You have to be able to put boots on the ground and make inroads to the English department, the physics department, the Chinese language department; there’s also a lot of transition in the academic space, so the people booking rooms for the music department last week have now moved on.”
McGowan agreed. “From a marketing standpoint, it’s a lot of work and it’s not easy work,” he said. “It’s not like we can just call the university and say, ‘Hey, here’s what we’d like to do.’ There are multiple silos and many of the departments are quite busy, so it takes a lot of energy and effort, but good ideas brought forward are received positively.”
For his part, Capps said, “We do a see a better mix of direct [bookings]in these markets, which is great for profitability.”
However, he noted, it’s important to look beyond the university. “We try to push the envelope a bit and grab business in the outer markets that we may be able to steal from some of the chain hotels,” he said. “We will play with our distribution, kind of sneak in some of those submarkets. Carnall Hall [in Fayetteville, AR, near the University of Arkansas]is a great example of that where you’re getting business out of Bentonville, trying to hit some of the stuff that’s hitting Walmart or Tyson; you’ve got to look outside the university for a little bit of an extra bump especially in those college off periods.”
When it comes to the university, however, it’s important to understand your guest. “We have to earn every room night, every dinner, every banquet,” van der Reijden said. “It’s not that you can just sit back and turn the faucet on and it will come automatically, because the university has the freedom to book wherever it wants, so you have to build the relationship and the reliability that they can count on.
“We have the SEC swim tournament that has sold out the hotel for five days straight at 100% occupancy,” he added. “We know what they require. Swimmers eat how many calories a day? If you’re not prepared for that, if you don’t understand the market, you’re going to fail. Next week, we have a person coming in from DC who travels with security to give a speech. The dynamic changes from day to day.”
One critical part of the operations in these markets? The food and beverage space.
Saxton Sharad, COO, Graduate Hotels, noted that F&B is a big focus for the brand. “Our lobby level café concept, Poindexter, and the full-service restaurants within our hotels are intended to be gathering places for the local community,” he said. “I’ve been incredibly focused on continuing to strengthen this part of our experience and ensuring that our menu offerings and inviting lounge areas speak specifically to the community they are located within.”
“I think it’s all about the food and beverage space and appreciating what the local community tastes and preferences are as the first priority in those spaces, so the restaurant is as busy on a Monday night as it is on Friday or Saturday night,” Masterson said. “It also really creates authenticity that this really is a community-focused project, and so people who are traveling there then get to be part of that community while they’re staying there.”
Cady agreed, pointing to Waterville, ME, where menu items will be priced at the local level so locals make it their go-to restaurant. “We could’ve priced things higher, but we want locals to come there three times a week. Making a food and beverage operation that is more focused on the town than maybe the university, alumni, students and faculty actually is a super important engagement,” he said.
Philipp turned to the Colgate Inn at Colgate University as an example. “When we’ve been retooling menus seasonally or relaunching concepts for food and beverage, we’ve been inclusive with the community, not just the ownership or the school, but actual members of the community who have been patrons for a long period of time, to participate in some of the menu selection process, tastings, things of that nature,” he said. “It has a profound impact of inclusion when we do that.”
All in all, van der Reijden said, “We need to make sure we have an experience that goes far beyond handing out a campus map. The school spirit can be included in the hotel by means of design, but that’s only veneer. You need to have a more holistic approach to the guest experience and the campus where the hotel is an actual extension of the university—not just the location but the spirit of the university.” HB