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In US, 100 Hotels Set to Open in 2010

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gillumhouse

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Internet Travel Monitor - Industry News
January 27, 2010
In US, 100 Hotels Set to Open in 2010
BENNINGTON, VT - Though it may seem counterintuitive at a time when many hotels around the country are having trouble filling their rooms, nearly 100 hotels are scheduled to open in major American cities this year. New York will have the most new hotels, 46, according to Smith Travel Research, a hotel research company in Hendersonville, Tenn., followed by Houston, with 30. New hotels are opening as well in Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami and Washington. That does not include new hotels opening in the suburbs of these cities. So how can so many hotels be opening even though the economy and travel remain so slow? The answer, according to Mark Lomanno, president of Smith Travel Research, is that "hotel building cycles rarely mesh just right with economic cycles." Planning a new hotel can take two to four years, and construction an additional one to four years. Most of the hotels getting ready to open were on the drawing boards several years ago, when the economy was healthy, demand for rooms was strong and room rates were rising quickly.
 

Morticia

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Does this make sense? Something that was on the drawing board in good times is built in bad times? I have a wish list of projects for the inn, they've been on the drawing board for 5 years. Still are because there's no money to do them. Big name store in town canceled the building and opening of new stores around the country. Why? No money. They realized spreading themselves thin(ner) in this economy would mean NONE of their stores would do well.
However, it is good that the construction people have work. But a lot of places don't need another stinkin' hotel.
 

gillumhouse

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Does this make sense? Something that was on the drawing board in good times is built in bad times? I have a wish list of projects for the inn, they've been on the drawing board for 5 years. Still are because there's no money to do them. Big name store in town canceled the building and opening of new stores around the country. Why? No money. They realized spreading themselves thin(ner) in this economy would mean NONE of their stores would do well.
However, it is good that the construction people have work. But a lot of places don't need another stinkin' hotel..
In light of recent discussions, I thought this would be of interest here. This week's TripInfo Newsletter was chockfull of interesting things!
 

Innkeeper To Go

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Does this make sense? Something that was on the drawing board in good times is built in bad times? I have a wish list of projects for the inn, they've been on the drawing board for 5 years. Still are because there's no money to do them. Big name store in town canceled the building and opening of new stores around the country. Why? No money. They realized spreading themselves thin(ner) in this economy would mean NONE of their stores would do well.
However, it is good that the construction people have work. But a lot of places don't need another stinkin' hotel..
No, this makes no sense. But 717 new hotels opening worldwide. And the hotels opening in America are opening in the worst markets possible.
But the are going to open anyway. Funding already allocated. They're hoping to at least start drawing in some dollars now that they've sunk so much into the construction.
With ADR already sliding, the new rooms will only make it worse.
 

JBloggs

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There are old decrepit hotels still around and closing all the time, it is a natural attrition. If only 100 new hotels open I think that would be way down from the "good economy" numbers of 500+ new hotels. It makes sense to me. Did someone think the whole country as we know it has halted? Not even close. Let's turn off the news and live our lives...the earth is still rotating around the sun.
 

JBloggs

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In your prior lives in your jobs surely you saw how thing were budgeted - I.T. Budget, Salary Budget, office furniture budget, the money is already allocated to those areas, yes and the plans are made and drawn and permits acquired.
Case in point our new government center for our county was budgeted for, now the locals do not get this and think they are wasting money on this new building and relocation of the county offices. It is paid for, it is a done deal, they can't go back and retract it. The county was very smart and it is paid for and yes now the electricity to run this building has gone up drastically thanks to power increases and THAT money will now have to be a peter to pay paul scenario. It is not there and has to come from some where.
 

Morticia

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There are old decrepit hotels still around and closing all the time, it is a natural attrition. If only 100 new hotels open I think that would be way down from the "good economy" numbers of 500+ new hotels. It makes sense to me. Did someone think the whole country as we know it has halted? Not even close. Let's turn off the news and live our lives...the earth is still rotating around the sun..
I think some of the problem with this is that some of the areas they chose DID slow down, considerably. Adding new hotels in an area that is depressed already, will definitely see attrition, but NOT with the new hotel. That will thrive simply because it is new, different. Look at any new mall that gets built. Shoppers flock to that one, with basically the same stores as the one 5 miles away, and the older one goes under. Heck, in one case where my parents live, the new mall was built across the street. A small street.
Obviously, I speak for my area only. Another new hotel is planned. Another 100 rooms from a shrinking pool of tourists. Because in some office somewhere someone thought there was room for another hotel. At first, we thought that, too. Oh, look, the Hilton is building here, that must mean there really is enough business. THEY have the resources to judge that. Yeah, right. All they did was suck the life out of some very nice smaller businesses.
 

Morticia

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In your prior lives in your jobs surely you saw how thing were budgeted - I.T. Budget, Salary Budget, office furniture budget, the money is already allocated to those areas, yes and the plans are made and drawn and permits acquired.
Case in point our new government center for our county was budgeted for, now the locals do not get this and think they are wasting money on this new building and relocation of the county offices. It is paid for, it is a done deal, they can't go back and retract it. The county was very smart and it is paid for and yes now the electricity to run this building has gone up drastically thanks to power increases and THAT money will now have to be a peter to pay paul scenario. It is not there and has to come from some where..
Joey Bloggs said:
In your prior lives in your jobs surely you saw how thing were budgeted - I.T. Budget, Salary Budget, office furniture budget, the money is already allocated to those areas, yes and the plans are made and drawn and permits acquired.
Yes, and with totally fuzzy-headed logic, if you didn't use your budget in one year, you lost it. So everyone spent money on things they didn't need just so they would have the money to fund the projects that were coming up in the following years.
The whole thing was idiotically wasteful. The managers who knew how to play the game had fat budgets and the ones who tried to do the right thing ended up with no money to fund anything.
 

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In my area alone there are 3 hotels in different stages of building and we had 2 others open their doors in '09. I recently spoke with 2 of our local hotel owners, one of which is currently building. He stated the same issues, money already accounted for, land purchased etc... When I stated "how are you going to pay the mortgage?" He really had panic all over his face. The second owner stated they had put their plans on hold waiting on better times. As he put it, there is no sense having 2 buildings sitting virtually empty with bills still coming in. With both hotel names being Nationally known, if I were putting stock in one of them, it would be the latter of the two.
 

Innkeeper To Go

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There are old decrepit hotels still around and closing all the time, it is a natural attrition. If only 100 new hotels open I think that would be way down from the "good economy" numbers of 500+ new hotels. It makes sense to me. Did someone think the whole country as we know it has halted? Not even close. Let's turn off the news and live our lives...the earth is still rotating around the sun..
I think some of the problem with this is that some of the areas they chose DID slow down, considerably. Adding new hotels in an area that is depressed already, will definitely see attrition, but NOT with the new hotel. That will thrive simply because it is new, different. Look at any new mall that gets built. Shoppers flock to that one, with basically the same stores as the one 5 miles away, and the older one goes under. Heck, in one case where my parents live, the new mall was built across the street. A small street.
Obviously, I speak for my area only. Another new hotel is planned. Another 100 rooms from a shrinking pool of tourists. Because in some office somewhere someone thought there was room for another hotel. At first, we thought that, too. Oh, look, the Hilton is building here, that must mean there really is enough business. THEY have the resources to judge that. Yeah, right. All they did was suck the life out of some very nice smaller businesses.
.
Morticia said:
I think some of the problem with this is that some of the areas they chose DID slow down, considerably. Adding new hotels in an area that is depressed already, will definitely see attrition, but NOT with the new hotel.
And one major reason the areas where the most new hotels are being built are already depressed is that there are already too many rooms.
Oftentimes folks assume that if the big guys do it, they must have done the math and it must make sense. That kind of flawed thinking really has no place in business anymore. We're in this mess because of flawed financial models.
The big guys make big mistakes. All the time.
These new hotels will add big problems to the boutique lodging industry everywhere. They are not picking up dead space left behind by attrition. They will agressively sell their rooms at ridiculously low prices. Not good no matter how you cut it.





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JBloggs

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In your prior lives in your jobs surely you saw how thing were budgeted - I.T. Budget, Salary Budget, office furniture budget, the money is already allocated to those areas, yes and the plans are made and drawn and permits acquired.
Case in point our new government center for our county was budgeted for, now the locals do not get this and think they are wasting money on this new building and relocation of the county offices. It is paid for, it is a done deal, they can't go back and retract it. The county was very smart and it is paid for and yes now the electricity to run this building has gone up drastically thanks to power increases and THAT money will now have to be a peter to pay paul scenario. It is not there and has to come from some where..
Joey Bloggs said:
In your prior lives in your jobs surely you saw how thing were budgeted - I.T. Budget, Salary Budget, office furniture budget, the money is already allocated to those areas, yes and the plans are made and drawn and permits acquired.
Yes, and with totally fuzzy-headed logic, if you didn't use your budget in one year, you lost it. So everyone spent money on things they didn't need just so they would have the money to fund the projects that were coming up in the following years.
The whole thing was idiotically wasteful. The managers who knew how to play the game had fat budgets and the ones who tried to do the right thing ended up with no money to fund anything.
.
Morticia said:
Joey Bloggs said:
In your prior lives in your jobs surely you saw how thing were budgeted - I.T. Budget, Salary Budget, office furniture budget, the money is already allocated to those areas, yes and the plans are made and drawn and permits acquired.
Yes, and with totally fuzzy-headed logic, if you didn't use your budget in one year, you lost it. So everyone spent money on things they didn't need just so they would have the money to fund the projects that were coming up in the following years.
The whole thing was idiotically wasteful. The managers who knew how to play the game had fat budgets and the ones who tried to do the right thing ended up with no money to fund anything.
That's business. Obv we don't run our own home finances in this manner, we are not budgeting a year in advance and having a board approve our spending.
I am just saying why some of these things continue, plain and simple, I am not judging how a business operates. Plenty have begun to build and went bankrupt, we have that at our lake in a few big developments that are now auctioned off to pennies on the dollar. Again, that's business.
 
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