Demand For Hotels Has Sunk Along With Oil Prices—But Supply Keeps Growing
Low oil prices have sunk demand for hotels in oil- and gas-centric regions of the country—but that hasn’t put a dent in supply growth, according to a study by STR's consulting and analytics division.
Through Q1, the 20 submarkets that account for the majority of hotels in oil-dependent regions saw an 8.8% drop in demand hand-in-hand with a 3.7% rise in supply, World Property Journal reports.
"Over the past five years, oil and gas regions have accounted for 20% of the new hotel rooms developed in the US," says STR's VP of consulting and analytics Steve Hennis. "However, now there is a glut in the world's oil supply, and that is having a noticeable impact in the US, where oil is more costly to produce.”