Surprise: hotel building boom will add to buyer’s market
In what might be considered a surprise with hotels often reporting low occupancies, nearly 100 hotels are set to open in major American cities next year.
New York City will have the most new hotels, 46, according to Smith Travel Research. They will be followed by Houston, with 30. Other cities were several new hotels are planned include Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami and Washington, according to Smith.
Those do not include new suburban hotels.
“So how can so many hotels be opening even though the economy and travel remain so slow?” asks The New York Times.
Mark Lomanno, president of Smith Travel Research, points out that “hotel building cycles rarely mesh just right with economic cycles.”
Planning a new hotel can take two to four years, and construction another one to four years. Most of the hotels getting ready to open were on the drawing boards several years ago, when the economy was healthier. At that time, the demand for rooms was strong and room rates were rising quickly.
Another factor: hotel experts say that once construction starts, the only alternative is to finish it.
“For the time being, all the new hotels will add to what was already a buyer’s market. Travel experts agreed that business and leisure travelers could generally expect a broader choice of rooms at better prices than a couple of years ago,” said the Times.
By David Wilkening
David
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