Monday January 20th, 2014 - 11:46AM
MINEOLA, NY—HVS has released the HVS Hotel Development Cost Survey for 2013-2014, which incorporates a range of data sources including development budgets, material and labor costs indexes and input from industry professionals, to track hotel construction costs in the United States. According to HVS San Francisco SVP Elaine Sahlins, author of the survey, research shows that by the end of 2013, the hotel investment market as a whole had largely recovered from previous recessionary years, but the trend in market-by-market hotel development has been uneven.
“The hotel fundamentals of stronger markets (primarily in coastal and urban locations) have improved to the point where the value of existing properties may be at or near the replacement cost, supporting an increase in new hotel construction,” Sahlins said. “Two trends continue to gain momentum: a proliferation of proposed select-service hotels and the increase in public/private partnerships to develop major hotels in a number of central business districts. Concurrent with the increase in hotel construction is a baseline reduction in hotel rooms across the US. As the inventory of obsolete hotel rooms contracts, a significant portion of new supply is replacing closed rooms.”
HVS has tracked hotel construction costs throughout the United States since 1976. The survey considers data for six lodging types: Economy/Budget Hotels, Midscale Hotels without F&B, Extended-Stay Hotels, Midscale Hotels with F&B, Full-Service Hotels, and Luxury Hotels and Independent Resorts.