The 57th Street entrance to the brand new, $375 million, Park Hyatt New York (Photo: Chris McGinnis)
If you like new or renovated hotels as much as we do, you’ll be pleased to know that investors are set to spend a record $6 billion on upgrades and new properties this year. That’s a 7% increase over last year, which set the previous record.
There are a whopping 400,000 new hotel rooms in the US development pipeline as of this month– that’s 14% more than this time last year according to STR. So if you like “new” when it comes to hotels, you are in luck.
Where most new hotels are under construction (Source: STR /Hotel News Now)
Many hotels were in desperate need of updating, especially as our appetite for technology has accelerated well beyond the previous standard. The impact of the recession of 2009-2010, in which there was a scary 40% drop in hotel capital expenditures, was a deferral of important and necessary investments. The hotel industry has now come full circle from those dark days.
Where are hotels sinking the most dollars?
- Smart TVs and improved wi-fi network access to take advantage of these multi-media, connected televisions. (Thank goodness.)
- Fundamentally redesigning hotels to include larger lobbies and public social spaces, reflecting the changing needs of the millennial travelers as that cohort grows into peak spending age.
- Improved and expanded meeting facilities, including connected technologies for more tech-heavy presentations and conference environments.
- Upgraded gym and fitness equipment to match rising awareness of the fitness-focused traveler.
Get this: A pool lit by chandeliers at the brand new JW Marriott Dongdaemun in Seoul (Photo: Chris McGinnis)
While these figures are limited to the US market, the trend holds worldwide (especially in Asia) as new projects come online with no-expense-spared designs. Plus, older hotels are digging deep for a property-wide refreshes to position their properties globally (like the Four Seasons Manele Bay in Hawaii).
With the markets steadily improving – and the stock market pushing near record highs – hotels are ideally positioned to benefit from the increased investments. Of course, this means hotels will keep up pressure on rates to recoup and enjoy return on the investment. Corporate negotiated hotel rates in the US for 2015 will increase 5.5-6.5% year over year, according to analysis by Bjorn Hanson, a clinical professor at New York University’s Tisch Center for Hospitality, Tourism and Sports Management.
A suite at the new Thompson Hotel in Miami Beach- opens Nov 21 (Photo: Thompson Hotels)
At TravelSkills, we love new hotels. They smell better, work better, feel better, and are usually bigger, brighter and hipper than others.
But new can also have its downside: Construction noise, service issues, locations in sketchy or “upcoming” neighborhoods. Some are so new that they don’t yet have a robust set of reviews on TripAdvisor.
In an ongoing feature, TravelSkills will report on the newest, most recently renovated and most notable business class hotels in the world’s most important cities.
And since the global hotel scene is always in flux, keep us posted with hotel tips, advice and recommendations from your trips in the comments below.
Latest cities covered:
Coming soon: Seoul, Honolulu, London
What’s your favorite new or newly renovated hotel? Please leave your comments below.
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