NYU: Hotel Industry Spending to Hit Record $6.4B
US lodging industry capital expenditures are on pace to hit a record $6.4B, a 7% increase from the previous high set last year, an NYU industry research report says.
Since the recession, hotel owners have steadily doled out dollars to stay current, increasing spending from 2010's $2.7B—a mammoth 137% jump in just five years.
The big cap ex jump comes from an effort to upgrade hotel amenities to appeal to Millennials, report author NYU professor Bjorn Hanson tells Bisnow, including in-room iPads, flat-screen TVs, high-speed WiFi, and enhanced fitness and conference rooms.
Some of the key amenity investments include:
- Guest room design
- Walk-in showers
- Redesigned lobbies
- Added or enhanced fitness facilities
- State-of-the-art meeting rooms and ballrooms
Interestingly enough, these big buck upgrades might not be exactly what Millennials are looking for, he tells us. "It's how it's delivered, " he says, adding that if you try to appeal to Millennials and don't deliver, "you're going to hear about it."
More than anything, it needs to be an attractive, interesting and functional space, he says. That's more important than the fact that it looks like it was "created to appeal to Millennials."
With industry disruptors like Airbnb shaking up the industry--as well as social media nearby to vent if standards aren't up to par--the industry is forced to keep up. "I think it's like when we went through the Bed Wars," he says. "We're in a period where many brand standard changes are being implemented. Once hotel owners are done pimping out their hotels, spending should return to normal.