Cushman & Wakefield’s Hospitality and Gaming Practice provides consulting and valuation services for new and existing hotel properties across the globe.
In the first quarter of 2020, the hotel industry across the U.S. began to be impacted by the Covid-19 pandemic. Occupancy and average rate declined rapidly and a reported 18.0 percent of the national lodging industry suspended operations. As of June 2020, the impact of the pandemic on travel and hotel use is anticipated to require a number of years to recover to 2019 levels. Along with other sectors of real estate, hotel development has begun to be impacted by the economic consequences of the pandemic. The news continues to evolve, and we are hearing of projects being shelved, cancelled, and, for those near completion, opening have been postponed.
This report focuses on U.S. hotel development and is based on data and perspectives from a pre-Covid-19 environment. With a decline in construction expected in the next few years, some industry representatives anticipate a possible decline in construction costs. With the increased use of online meeting platforms and the reduction in food and beverage services, some changes in the outlets and meeting space facilities may inspire changes in physical design with an increased integration of technology. Whether these changes will be long term trend and how they impact development costs remains to be seen.
