Great news for developers and investors, the hospitality industry is in high demand! and reaching new heights!
“The continued strength in room demand surprised on the upside,” says Jan Freitag, senior vice president of lodging insights for data firm STR.
The strong demand for hospitality developments
Hotel room rates are higher than ever and keep rising, while occupancy rates for the last year, ending in the second quarter of 2017, are moving at record pace. Averaging out to eight of ten rooms being occupied every night. Leaving plenty of room for new developments, while recent construction is being easily absorbed.
“Room demand is at an all-time high,” says Freitag. “The U.S hotel industry—through August—has sold more rooms than ever before.”
Demand is expected to continue to grow in 2017 and 2018. That’s because the U.S. economy is still relatively strong. “As long as the U.S. gross domestic product is in the 2-percent range, we do not see growth slowing down,” Freitag notes.
Our economy remains strong and is anticipated to remain this way, giving new construction room to expand. Investors are likely to expect healthy returns on their investment.
“I am still surprised that the amount of construction taking place is relatively modest, given how strong fundamentals are,” says Jeff Myers, managing consultant for CoStar Portfolio Strategy. “
“We do not see a slowdown in the U.S. pipeline of hotel properties in development,” says Freitag.
The key to a successful project is to stand out from the competitors. New construction and upgrades of existing properties will need to focus on high tech and ‘green’ construction.
As an industry leader in the Southeastern United States, SWET Construction Group offers complete interior and exterior finish packages. We halide all aspects of renovations and repair services, including disaster repair, from demolition to finishes.
Contact SWET Construction Group for your next project.