A few years ago, before the Great Fall of 2008 but long enough after September 11 that folks were back to traveling with enthusiasm, the economy was humming along and the hotels were packed. So many of the largest hotel chains decided to build new joints.
Flash forward to 2010. It is probably fair to say that this is not exactly the ideal time to open new lodging for tourists and business travelers. And yet, that is just what is happening—to the tune of close to 100 fresh hotels sprouting up around the country this year. Does that spell trouble for the likes of Marriott and InterContinental, which operates the Holiday Inn chain? Actually, maybe not.
Of those 100 new units, nearly half of them are opening in New York City. That's not by accident: Between 2004 and 2008, 85% of New York hotel rooms were occupied, while the cost of the average room soared by 86%. After NYC, Houston is the city that will see the most hotel openings this year. There will be 30 such structures swinging wide their doors in 2010. In recent years Houston has become a hot spot for lodging developments, as both growing energy businesses and Hurricane Katrina-prompted relocations have caused demand in the area to spike upward.
Now it appears that the large hotel chains are simply crazy like development-happy foxes. Which could mean good news for the rest of us. Someone has to staff all these new buildings, after all. And with the number of available rooms rising so quickly—over 12% in New York City alone this year—analysts expect room rates to plummet for most of 2010. Meaning now is the time to finally schlep the kids to the Great White Way for a Mamma Mia! matinee. And when you do, not only will your kids have a blast (um, don't quote us on that), but you'll be helping several sectors of the economy at once.