September 14, 2010 9:39 am
According in today’s issue of Hotel News Now, STR/TRW/ Dodge is reporting a year over year decline of 24.2% in hotel construction starts. Every bit of positive news is helpful in today’s hospitality environment. I told one of my best owner clients to remain positive and he said he was… he said, “I am positive that my business is in the crapper!!!” Although his comment was made in fun (somewhat), we are seeing definite signs of life. Our activity is up considerably over the first half of 2010. We are seeing stabilizing revenues and some pockets of improvement. Of course, we are still facing the problem of the gap between a buyer’s willingness to pay and a seller’s expectations, but that issue will always be present… it is just a little deeper than normal, as caution is deeply embedded into each buyer’s psyche.
Having a lid on new development will certainly curb new competition, as the hospitality industry seems to always eat its own with new development. We have always emerged from previous downturns… and the weakness of the development pipeline will certainly help the recovery process.