Looking At The Numbers

Looking At The Numbers

Both STR and Lodging Econometrics forecast hotel demand will continue to increase over the new few years. The softness of that increase is attributable to financing under the current regulatory environment.

Those hotel investors who can navigate the stormy financial waters will reap the rewards of that increasing demand while taking advantage of of historically-low interest rates.

The major franchises continue to freshen their prototypes and roll out new flags to respond to demand as well as give investors increased opportunities to place product in brand-saturated locations.

According to Jan Freitag, Senior VP of Global Development at STR, “The smart money is building right now. The really smart money is opening right now because they were building in 2009.” For private hotel investors who can get financing, now is the time to get going. That’s because the supply pipeline is at the bottom of its current “u-shaped” cycle.

Bobby Bowers, Senior VP of Operations at STR said, “My guess is you’ll see pickup in the planning and pre-planning stages by the end of 2011 and into 2012. You’d like to think that before too much longer, the turnaround will accelerate. If you’ve got new product out there, you’ll be in a good position to capitalize on it.”

Patrick Ford, President of Lodging Econometrics, suggests that if the current economy moves forward, even if only slightly, hotel operations will perform “through the roof.”

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