Q&A with Andrea Grigg -JLL Hotels & Hospitality

A JLL veteran, Andrea Grigg joined the company in 2007. Today, she leads the firm’s North America hotels asset management business and is an integral member of the firm’s global asset management business. Her projects span across the major North American gateway markets, and her client base includes domestic and offshore hotel owners.

Hotel Business sat down with Grigg to find out what she’s been up to, to learn more about the challenges in the asset management space and
to dive deeper into the trends she’s been following.

What have you been up to in your new role? As the leader of the North America Asset Management team, my top priorities include expanding our presence in the United States and globally. Additionally, I’m focused on ensuring the JLL Hotels Global Asset Management team is providing the highest quality and consistent services across all markets, and that our resources are deployed to meet our clients’ ambitions.

How has JLL evolved in the 10 years you’ve been there? Digitization and data-driven insights continue to play a critical role in how we best provide solutions for our clients, and JLL has made a real commitment to investment in technology. We’re increasingly using strategies, including digital visualizations of our data and process automation, so we can spend more time creatively working on behalf of clients.

Additionally, we are a more globally integrated platform. The hotel industry is attracting more investment interest than ever, and hotel ownership often spans across regions—the need to understand the global hotel environment and build strong partnerships and a culture of information-sharing across regions is a priority for our team.

Describe JLL’s portfolio of asset managed properties. While we have a diversified asset management portfolio, globally, our practice dominates the luxury space, and we asset manage more than 90 hotels for some of the most prestigious real estate investors in the world. Our team’s ability to collaborate across regions, share best practices and leverage our relationships at the highest level of the brands’ and operators’ organizations, combined with “boots on the ground” specialists in each region, enhances our ability to deliver results for our clients.

Key differentiators influencing our strategy with these properties are our extensive track record of working with major international hotel operators, which has helped us develop a proprietary database of detailed performance statistics; our disciplined approach to extracting the best performance from hospitality assets by identifying immediate- to long-term business and value-add opportunities; and our relentless pursuit toward value maximization, which has taught us that strategic thinking pays big dividends.

What are the top challenges asset managers face today? Protecting your assets from brand cannibalization, developing a comprehensive distribution strategy, attracting talent and managing ever-rising labor costs are the top challenges we face today.

There are many new brands and distribution channels entering our space, so the need for owners to ensure they are differentiating their offering beyond brand standards while efficiently managing operations requires skill and thoughtful approach and collaboration.

Developing a comprehensive distribution strategy must factor in content, which must be individually optimized for every channel; keeping messaging consistent across channels; and viewing all distribution channels holistically and diversifying a hotel’s channels to reduce reliance on OTAs and help it sustain long-term growth.

Understanding and optimizing labor management systems makes a difference if the systems are configured properly and embraced at every level of the organization.

What’s your take on the major asset markets today? Commercial real estate used to be considered an alternative investment—this is no longer the case. There are many more nontraditional and generalist investors, yet hotels have a complex operating platform and require special attention to management. Investors are seeing that hotels are a strong strategy for generating attractive returns—but they need to approach ownership and management thoughtfully.

What are some of the top trends in asset management? Many of today’s top trends focus on experience. Incorporating wellness is growing in importance; this ranges from group meditation sessions, to having yoga mats and Pilates channels available in guestrooms, to offering higher-quality lighting and increasing sustainability and green-friendly efforts. Additionally, incorporating unique design elements that are often personalized to the city where the hotel is located continues to be more prevalent.

We’ve also seen a rise in dual-branded hotels. From an asset management perspective, the primary benefit is that owners and the hotel brands gain exposure to a wider pool of potential guests and have the ability to optimize revenue per square foot.

What are the trends in hospitality you’re paying close attention to? The use of space in hotels, which is evolving in real time. For example, a growing number of assets are transforming underused spaces in communal areas or outdated business centers into modern, vibrant coworking spaces and reimagining meeting and event space in order to offer the latest technology, a modern, fresh design to the room and creative food and beverage concepts.

What’s the future of asset management? The role of an asset manager is being an active voice for ownership, with the goal of turning around the cash flow and maximizing the internal rate of return through a successful exit. Amid increasingly complex operating agreements, a more competitive hotel market, the challenge of attracting increasingly sophisticated and less loyal travelers, and rising labor costs, asset management will continue to grow in importance. HB