Building a Better City with Hospitality
SHA symposium examines “transformative power of real estate” to help communities
Building, buying, and selling hotels, resorts, and restaurants is a challenging business to begin with, even more so when you’re trying to support a diverse local community. On Wednesday, November 8, the School of Hospitality Administration hosts the 2023 Hospitality Real Estate Symposium to explore “the transformative power of real estate.”
Representatives from Boston City Hall and the Black Economic Council of Massachusetts, along with several movers and shakers in the local hospitality business, will be on hand to talk about the challenges of evolving urban landscapes and the way projects can have an impact on the wider community.
“I will always believe that hospitality has a responsibility in being a really powerful force for positive change,” says Kaushik Vardharajan, an SHA associate professor of the practice and director of its real estate program.
The event is free and open to all; register here. It will also launch the graduate degree Master of Science in Hospitality Real Estate, which begins in fall 2024 and is aimed at both those who’ve already been working in the field and students who have just completed their undergraduate degree.
Wednesday’s symposium will consist of two panels. The Future of Urban Real Estate panel will include a close look at the Massachusetts Life Sciences Center and other developments underway in Roxbury’s Nubian Square. It will be moderated by John Borders IV, director of tourism, sports, and entertainment for the city of Boston. Panelists are Hilina Ajakaiye, executive vice president, Meet Boston; Nia Grace, experience architect and business owner, Grace by Nia and Darryl’s Corner Bar & Kitchen; Nicole Obi, president and CEO, Black Economic Council of Massachusetts; and Darryl Settles, president and managing partner, Catalyst Ventures Development (and proprietor of Darryl’s Corner Bar & Kitchen, 1990–2018).
Although none of the panelists are directly involved in the development pictured above, the council’s offices are in Nubian Square and Grace is developing a jazz club there. They’ll delve into aspects of Nubian Square’s ongoing transformation, including raising capital, empowering minority-owned businesses, affordable housing, adapting to changing work patterns, environmentally sustainable construction, and integrating culturally vibrant entertainment venues that reflect the community.
The panel, being held from 4 to 5:30 pm on the 17th floor of the Center for Computing & Data Sciences, was conceived to offer a wider view of hospitality real estate—such as discussing community engagement and strategic planning that centers on DEI, sustainability, and cultural vibrance. But the event is geared toward anyone in the BU community interested in building more inclusive and sustainable cities.
As SHA sees it, the hospitality sector also includes convention centers, team parks, and music performance venues.
“If you put a great hospitality development in the community, it has the ability to either enhance the appeal and the standards of the community,” Vardharajan says, “or you can build something that just sucks resources out.
“You see that quite often in resort locations. Resorts can be a powerful force for change, creating employment and helping to support local businesses that can be vendors to the resort, or they could be a resort that just sucks out water and food and other resources from the community that they are in,” he says. “So, I will always believe that hospitality has a responsibility in being a really powerful force.”
The symposium will also include a panel of SHA alums, from 2:30 to 3:30 pm, aimed at helping current students understand the kind of jobs they could soon be doing and exploring ways of getting hired. Panelists are Zach Demuth (SHA’11), global head of hotels research, JLL’s Hotels & Hospitality Group; David Ruger (SHA’08), vice president of investments, HEI Hotels & Resorts; Jonathan Jaeger (SHA’09), senior managing director, LW Hospitality Advisors; Spencer Davidson (SHA’12), senior vice president, Hunter Hotel Advisors; Chelsea Salamone (SHA’14), senior director of acquisitions and development, Standard and Bunkhouse Hotels; and Priya Tewani (SHA’22), a real estate analyst, Sonesta Hotels.
I will always believe that hospitality has a responsibility in being a really powerful force.
As for the new master’s degree program, Vardharajan says, “we need a program that truly addresses the complexity of hospitality real estate, and that’s where the master’s came about. Now we are the only hospitality school in the US to offer a Master of Science, an actual graduate degree, in real estate.” He notes that hospitality represents one of the most complex sectors of commercial real estate to develop and manage.
The major sectors of commercial real estate include office, retail, multifamily, and industrial. When a developer leases out office space, the contract determines how much they are paid per square foot per month. Usually, every three years or so, there will be a 5 percent increase, Vardharajan says. So, the developer knows for the next 10 years how much they’re going to get paid, and they don’t have to do anything else except maintain the common areas.
“With hotels, I have to resell the product every single night,” Vardharajan says. “I might have sold all my rooms last night. That’s great. How much are we selling tonight? Because I have to go back and resell it again tonight and again tomorrow night and again the night after. Pricing is different every day. Demand is different every day. And I have to manage all of those fluctuations in volatility. I have no clarity on how much money I’m gonna make over the next year. I can estimate, but there are no guarantees. Which is why hospitality real estate is so complicated.”
Vardharajan says the graduate program will teach students “how to build products that first are financially viable [and] then also focus on the fact that you need to build products that are in line with the community, with the needs of the community, and that will be a positive force for change—something that creates opportunities for people. Those are the kind of values that we believe in.”