Hotel Owners Pumping Brakes On Development, Investment
Rising costs, lackluster demand and staffing challenges are causing hoteliers across the country to rethink investments in their existing hotels and development of new projects, according to an August survey by the American Hotel & Lodging Association.
Thirty-two percent of respondents reported delaying projects, while 24% reported scaling back new projects.
Only 8% of property owners and operators said they were moving forward with new investments, but 8% also said they had completely scrapped planned projects.
A significant factor, AHLA said, is a slump in demand from all travel sectors. Twenty-six percent of respondents said they saw drops in upcoming bookings compared to the same period last year. Leisure stays were down 30%, and business, group and government travel saw drops between 15% and 17%, respondents said.
The survey reflects the plans and sentiments of almost 400 hotel owners and operators nationwide.
The survey results line up with what STR President Amanda Hite told the New York University International Hospitality Investment Forum in June, that macroeconomic concerns were the reason bookings for July and August were down nationally, Hotel Dive reported.
Bisnow has reported that only the top tier of hotels is seeing revenue per available room growth, with all other sectors flat or declining.
Second-quarter earnings from major hotel companies, including Hilton, InterContinental Hotels Group, Choice Hotels International and Wyndham Hotels & Resorts, all showed RevPAR declines in the U.S., according to Hotel Dive.
