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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.”
Hotels in these regions may see some light soon, as oil climbed back over $45/barrel in April—although some analysts say oil’s recent rally is bound to reverse itself. [WPJ]
