Hotel Development Investment Outlook for 2018
Hotel development continues to be a solid investment in the US. Factors contributing to its success include strong consumer economics, continued healthy demand for corporate travel, and increased spending overall for recreation and travel.
In general, the US economy is expected to continue to grow. GDP growth is expected to remain healthy, between 2% and 3% per year through 2020. With low unemployment and wages trending up, consumer spending is also expected to grow. Hospitality industry analysts predict that the stable economy, coupled with tax incentives, will bring hotel occupancy to its highest levels since the 1980’s. Key performance indicators for the hospitality industry in general have been at record performance and are expected to continue to increase steadily.
As consumer confidence increases spending, businesses will experience growth. This growth will translate to increased business travel, further improving hotel occupancy levels. Hotel supply growth will help keep rates in check to optimize this growth, and a healthy balance of business and transient customers will ensure profitability.
Finally, as consumer wages increase, they will have more money available for discretionary spending. Consumers are buying fewer goods and more experiences, which is an advantage for the hotel industry. Increases to consumer buying power internationally, particularly in the Asia Pacific region, will result in more inbound US travel, further enhancing the US hotel market.
To discuss your options for hotel and other real estate investments, contact American Life, Inc. today. Our team of investment professionals is committed to building positive outcomes for our clients. We oversee the entire real estate process, including site acquisition, construction, and operations management. Contact us at 206-381-1690 in the US at our office at 2710 S. Hanford Street, Suite 100, in Seattle, Washington or at any of our international offices in Shanghai, Tokyo, or London.