Why the Hotel Market Keeps Defying Expectations

The hotel business apparently didn't get the memo that everything is supposed to be terrible.

Consumers feel squeezed. Credit-card debt keeps climbing. Business travel remains soft. Hotel construction faces the same cost and financing challenges we've discussed for years.

Yet hotels keep performing, people keep traveling and owners keep making deals.

So what's actually holding this market together?

I asked Bruce Ford, SVP at Lodging Econometrics, to help me make sense of it. We talked about why event travel continues to deliver, how hotels can offer deals without destroying their rates and why the biggest opportunity ahead may have less to do with building new hotels.

One number caught my attention: Bruce expects the industry to renovate or convert between 325,000 and 375,000 rooms during each of the next couple of years.

That could create a very different hotel investment market than many people expect, with major implications for owners, brands, management companies and industry suppliers.

Watch my latest #NoVacancyNews conversation with Bruce to hear where he sees the hotel market heading next.

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