Here's a recent video from The Wall Street Journal talking about the "secrets behind hotel design." It's interesting in that it gets into some of the ways in which designers are shrinking hotel rooms and then making up for it with amenities. This is a strategy you'll find in many other real estate asset classes ranging from multi-family housing to co-living.

But if you scroll through the comments, you'll see that the responses are overwhelmingly negative. In fact, I was hard pressed to find any positive ones. Most people simply don't like the idea of hotel rooms shrinking and of not having the same amenities. This is not surprising. The comments are similar to what you'll hear people say about shrinking condominium suites.

At the end of the day, though, the strategy outlined in this video is designed to cater to a very specific market: young travelers (roughly 25 to 40 years old) who want to stay somewhere fun and social — and at a reasonable price. Room size is the lever that helps bring rates down. But it's not for everyone, and that's why hotel companies have so many different brands in their portfolio. It's so they can precisely target different customers and types of travel.

Speaking from personal experience, I can tell you that my wife and I have stayed in numerous hotels where the entire room was basically just the bed. Here's Tokyo from this past winter. And in one particular hotel in Paris, there wasn't even enough space for me to fully open my carry-on suitcase. If I wanted to open and close the window beside our bed, I had to first close my suitcase.

I'd happily stay there again. The place was well-designed, clean, had good bathroom products, was in a great location, and the pricing was reasonable, especially for Paris. As a hotel customer, I consistently value design and experience over square footage. And the market suggests that I'm not alone. Cool and reasonably priced is often a winning strategy no matter what industry you're in.

The Wall Street Journal recently published an article called, "Atlanta's Growth Streak Has Come to an End." It's behind a paywall, though, so I don't actually know what it says. But Paul Krugman did write about it, here, and I do know that one of the key statistics that you should know is this: For the first time since the data was collected, net domestic migration to Atlanta has turned slightly negative.

Overall, the metro area is still growing because of natural births and international migration, but it's still noteworthy that more Americans are leaving Atlanta than moving there. Because up until recently, Atlanta was a high-growth metro region. It's an important logistics hub and it has had an elastic housing supply model. That is, it used suburban sprawl to keep home prices in check.

But that is starting to change. Housing supply is dropping and traffic congestion has become one of the worst in the US. Paul Krugman hypothesizes that this is an example of "the limits of sprawl." And I would agree with this. Sprawling cities have the advantage of being able to grow quickly when they're relatively small. But eventually, they reach a population and geographic limit where the model starts to fail.

The Atlanta urban region is massive. As defined by the US Census Bureau, it is 6,612.4 km2. The only urban region that is bigger is the one around New York City. Los Angeles — which might come to mind as another large car-oriented metro region — is smaller. It's about 4,239.4 km2, but with ~2.4x the population of Atlanta.

It may also surprise you to learn that Los Angeles is remarkably dense. When looking at the entire built-up urban area, it's the densest in the US at 2,886.6 people per km2; whereas Atlanta is one of the least dense big city regions at 771.3 people per km2. This figure really stands out when you compare it to its peers, which means it's going to be that much harder for it to overcome the limits of sprawl.

Density is the unlock that allows you to get people onto trains.

People like ski and snowboard towns. Here's an excerpt from a recent WSJ article talking about Park City:

Prices continued to rise in most luxury ski towns this past year, but none grew as much as Park City, a former silver mining town 32 miles east of Salt Lake City. The average home sale price there grew 35% in 2023 from 2022, compared with a 9.4% increase at Vail and Beaver Creek and 3.2% at Aspen, according to the resort report by Summit Sotheby’s International Realty. 

The main point of the article is this: Park City has gotten really expensive, and so people are now looking and buying homes further out in places like Heber City, Midway, and Kamas. Here's how expensive expensive is:

Over the last four years, Covid has stoked demand for western resort real estate. In Park City, single-family homes have sold for a median price of $4 million year-to-date, up from $1.996 million in 2019, according to Redfin, which averaged the monthly median sales prices weighted for the number of homes sold. One home was listed in September for $65 million, which could set a record for the state. It’s now under contract, according to listing agent Paul Benson of Engel & Völkers, who declined to disclose the sale price.

This, of course, isn't a novel phenomenon. It's the whole "drive until you qualify" thing. But what's interesting about this particular mountain example is that it's not centered around access to a CBD or downtown; it's centered around "how fast can I get to a ski and snowboard resort?"

For example, Deer Valley has a new East Village that is expected to open up in 2025. This brings the cities mentioned above closer in. And buyers seem to be doing that math: "It's a 25-minute drive today, but next year I'll be able to get on a lift in 15 minutes. Score."

Given that Deer Valley also doesn't allow snowboarders, it's interesting to think about how these trends could be bifurcating the region between skiers and snowboarders. I don't have any data on this, but I bet if you mapped it out, there would be some sort of clustering happen.

The article also goes on to talk about transportation. Because you can't talk about new development and real estate without talking about traffic. But I think Bill Ciraco (Park City Council) gets it exactly right in the article: This is a car problem, and less of a people problem.

In my mind, the Wasatch Range is destined for something like this ONE Wasatch concept, which is/was a proposal to link seven resorts through a handful of new skiable connections. This is similar to what you'll find in Europe, and it means less driving and more time on the mountain.

That's what everyone wants to be doing anyway.

Photo by Lauren Pandolfi on Unsplash