With reports of new hotels popping up across the country, the hard times that followed the Great Recession of 2008 seem to be finally abating for the hospitality industry. New construction, restoration and revival of older properties, investment in digital offerings for millennials, and a touch of local flavor to distinguish these offerings are evident in the flurry of activity everywhere.
As Choice Hotels CEO Steve Joyce pointed out to The Associated Press, this is going to be "a monster summer" in terms of occupancy and sales. Upcoming elections and a sharp flux in the global economy may still affect markets, but the predictions are strong and the mood upbeat — a perfect recipe for success, more so for the budget chains that are spread across the U.S.
One of the key reasons for this growth is being attributed to the dirt-cheap gas prices that are encouraging more Americans to plan road trips this summer. Stronger job and housing markets have laid the foundation for travel plans as travelers browse through the array of options for stay and entertainment.
The average American is finally beginning to see some savings in the bank, but remains a cautious buyer. Low gas prices are a definite bonus as Americans can now plan a trip within a wonderful budget. Some may even plan multiple getaways, because affordability will be the buzzword this year.
According to the January 2016 STR Global Pipeline Report, there is a 13 percent increase in the number of rooms under contract compared with January 2015 and a 17.1 percent year-over-year increase in rooms under construction in the U.S. hotel pipeline. However, this does not include projects in the planning, discussion or unconfirmed stage, so the figure could be higher. 49 percent of these constructions are concentrated in the top 26 markets which includes New York, Houston, Dallas, Miami, Los Angeles, Long Beach, Orlando and Chicago.
To benefit this summer, there is an imperative need to understand influences in consumers' decisions. Hoteliers know guests want advanced digital offerings that go beyond free Wi-Fi. They want a seamless convergence with their many devices and to be wowed by innovation. At the same time, they want comfort and entertainment with deals that will allow them to explore within a budget, for boomers and millennials alike.
In fact, as Joyce pointed out, travelers no longer want their chain hotels to be generic. Since they are planning to be on the road more, they want their hotels to sport the unique local flavor, which will add more spice to their itinerary. Regionally-themed concepts in décor and design are going to be a big part of new and old constructions this year.
It’s going to be an especially big year for the mid-range hospitality brands — the kind Americans love to stay in during road trips. Hilton, Marriott, Choice Hotels and Starwood groups are among the many brands that are expecting a major boom and feeling upbeat. Lower gas prices leads to road trips, which in turn leads to more highway and overnight travel by Americans. For brands like Marriott, this encompasses 80 percent of their market.
Regional developments are highlighted in the news as well. Nashville, Tennessee, announced adding 600 more rooms to their hospitality inventory; Wilmington Riverfront in Delaware announced 300 hotel rooms; and Orlando, Florida, is expected to outgrow even the national rates.
