New properties approved during the boom are coming to the market
Joel Ross, principal of Citadel Realty Advisors, also known as “Dr Doom” by regular readers of his columns about the economic outlook facing hoteliers, writes that “many in the hotel industry are in for a rough ride going forward.” To stay competitive, he says, hotels need to invest in a cost-effective way in order to offer an excellent yet economical customer experience. Right now, he adds, “it is all about operational expertise, revenue management, customer service and maintaining the asset.” Many properties are starting to look over-worn but lack the money for renovation. At the same time, many of the projects that were approved in the boom years are coming onto the market. It may be possible that nothing new will be added for a while, but older properties will have to be kept up and stay hospitable to remain competitive. Meanwhile, hoteliers should not be persuaded by projections of big increases in the value of assets.
[pictured: Radisson Blu Hotel Latvija, Riga]