Hotels Continue To Open In 2010

It’s surprising to hear that about 100 hotels will be opening in major American cities in 2010. However, as Mark Lomanno said hotel development occurs during a time of strong economic conditions and during that process it takes a few years to finish construction of a major hotel.  The downside is after these hotels are completed major hotel investments will decline as seen in previous investment busts, directly contributing to construction job losses.

From Jane Levere at the NY Times: Even More Room at the Inn

“Though it may seem counterintuitive at a time when many hotels around the country are having trouble filling their rooms, nearly 100 hotels are scheduled to open in major American cities this year.

New York will have the most new hotels, 46, according to Smith Travel Research, a hotel research company in Hendersonville, Tenn., followed by Houston, with 30. New hotels are opening as well in Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami and Washington. That does not include new hotels opening in the suburbs of these cities.

So how can so many hotels be opening even though the economy and travel remain so slow?

The answer, according to Mark Lomanno, president of Smith Travel Research, is that “hotel building cycles rarely mesh just right with economic cycles.” Planning a new hotel can take two to four years, and construction an additional one to four years. Most of the hotels getting ready to open were on the drawing boards several years ago, when the economy was healthy, demand for rooms was strong and room rates were rising quickly.”

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Tags: economic progress, hotels, Market

This entry was posted on January 19, 2010 at January 19, 2010 and is filed under U.S Market. You can follow any responses to this entry through the RSS 2.0 feed.