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Still More Hotels Being Completed During Slump

By Anonymous

Even with occupancy rates at record lows since the Great Depression, there are still a number of hotel projects being completed. It takes a number of years to build a new hotel, and all these projects were planned during the bubble years.

This has significant implications for non-residential investment and construction employment in 2010. As these large projects are completed, there will be more construction job losses, and less investment in non-residential structures.

And it definitely doesn't help the occupancy rate to have more rooms!

From the LA Times: New L.A. luxury hotels face tough debuts

The newest downtown hotel complex buzzed with activity this week as carpenters, electricians and gardeners hustled to put the finishing touches on the $970-million skyscraper that rises over the Los Angeles Convention Center and the L.A. Live entertainment center.

But when the glass-sheathed tower that houses the JW Marriott and Ritz-Carlton hotels opens next month, it will face one of the worst slumps in years for the hospitality business.
...
In 2009, hotel revenues took their steepest decline in more than two decades, and the occupancy rate in Los Angeles now hovers at a meager 65%.
...
Other upscale hotels are also opening in Los Angeles under economic clouds this year, all aiming to survive the steep drop in demand.

The $360-million W Hollywood Hotel & Residences at the corner of Hollywood and Vine is scheduled to open Jan. 28.

Full post as published by Calculated Risk on January 16, 2010 (boomark / email).