HVS has released the 2012-2013 HVS Hotel Development Cost Survey, 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 Senior Vice President Elaine Sahlins, author of the Survey, research shows that while hotel development on a national basis is expected to be constrained over the next few years, there are pockets of new supply coming up in strong markets such as Austin, Detroit, and Chicago.
“We have also noticed a variety of interesting trends that have emerged in the last 12-24 months,” Sahlins adds. Trends that have emerged in the last 12 to 24 months include an increase in proposed select-service hotels in suburban and urban areas and the construction of major convention hotels in a number of central business districts. Conversely, we are not seeing new luxury hotel and resort development being proposed, due to a feasibility gap between economic value and development costs.
“Financing and feasibility constraints have sidelined developments at the high end of the hotel spectrum. Hotel development costs continue to escalate, but as markets recover and occupancies reach or exceed prior peak levels -- enabling operators to drive average rate growth -- we are seeing opportunities for new projects.” Since 1976, HVS has tracked hotel construction costs throughout the United States. The survey considers data for six lodging types: Economy/Budget Hotels, Midscale Hotels w/o F&B (without Food and Beverage), Extended-Stay Hotels, Midscale Hotels w/ F&B (with Food and Beverage), Full-Service Hotels, and Luxury Hotels and Independent Resorts.
Elaine Sahlins holds an undergraduate degree from Barnard College, Columbia University in New York City and an MPS degree in Hotel Administration from Cornell University. After graduating from Cornell she worked for VMS Realty in Chicago analyzing hotel investments, and then went on to become a review appraiser in San Francisco at Security Pacific, which was subsequently acquired by Bank of America. She joined HVS in 1997 in the San Francisco office. Elaine assumed responsibility for the Hotel Development Cost Survey in 1998.
Please click here to view the Hotel Development Cost Survey.
+1 (415) 268-0347