US HOTEL PRICES seem likely to rise as developers struggle to raise cash for new ventures, stifling capacity growth.
New Hampshire-based Lodging Econometrics (LE) says 705 new hotels, totalling 79,701 rooms, will have opened in the US by the end of this year. That compares with 1,315 openings (147,443 rooms) last year, and 1,341 (154,259 rooms) in 2008.
The situation is expected to worsen. Many of the developments opening this year were too far advanced to be stopped when the recession hit. However, LE reckons there will be only 673 new hotels coming on stream in the US next year, and only 671 in 2012. "For developers, a lack of construction financing from the main street banks remains a serious roadblock, as it is nearly impossible to access [funds] for new hotel projects," says LE.
By contrast, travel industry research company STR Global calculates that more than 1,000 hotels, totalling more than 250,000 rooms, are planned for the Asia-Pacific region. China accounts for more than half the new developments, with plans for 138,000 new rooms - more than the pipeline for the whole of Europe.
Europe's pipeline of 118,126 rooms (678 hotels) is dominated by the UK (26,155 rooms), Germany (17,092 rooms) and Russia (15,816 rooms). Nearly 150 new European hotels, with more than 24,000 rooms between them, will have opened by the end of this year.