Hotel Experts Talk Recovery and New Development Opportunities

Hotel experts at the recent American Lodging Investment Summit (ALIS) could be labeled as cautiously optimistic about what they opined on in terms of the outlook for growth and new hotels this year and next. Other specialists in a separate report provide a good foundation and reason why hotel-retail mixed-use development may signal the start of new construction once again in the USA. According to the findings: Select-service hotels with brands such as Marriott and Hilton show the most growth in terms of new construction projects. These major flags also have the ability to do deals of 10’s of 1000’s of guestrooms, because lesser known brands do not have the financial sponsors to develop and open that many hotels, according to several hotel experts speaking at ALIS. One of the speakers, Mark Elliott, senior managing director at Hodges Ward Elliott, said he would advise hospitality newcomers to invest in the select-service segment because it is producing “very high returns. It’s a simple and safe way to enter the business.” In a separate report on new development in Hotel Business, JMBM hotel lawyers Jim Butler and Guy Maisnik make the case that hotel-retail mixed-use will rise in several cities across the USA due to the economy and the partnering of shopping and tourism in a given location. A key point made here for hotel investment advisors are the creative methods available for the shopping center owner to finance the development. Another is that the next few months will show big names in the shopping center and hotel industry announcing joint venture projects. However, the growth in franchisor brands as a result of more new development and construction can also create oversaturation of certain lodging segments in several markets from a hotel management expert perspective. This in turn will lead to oversupply in many markets with slowdowns in the growth of hotel occupancies and average room rates. Many hotel experts agree that the current cautious optimism is fueled in part by the softening of any new supply in the construction pipeline in prior years. That same abundance of pipeline with too many brands is what helped the lodging industry start to slide in its growth cycle in 2007, and prior to the last recession actually beginning. What say you?