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Looking for a room at the inn? It’s getting easier to find a cheaper place to stay in the United States.
More than 600 new hotels with about 65,000 rooms are expected to open in 2013 – a jump of more than 40 percent compared with last year, according to hotel data consultants STR Analytics. And that’s going to open the door to some travel deals in the second half of the year.
In the period after hotels open, expect deals at the new properties as well as at local competitors, says Dave Kolankarai, senior director of market management for Hotels.com, a subsidiary of Expedia Inc.
In addition to cheaper rates, a hotel might toss in – or discount – extras through “value-added” packages. That might include a room that comes with parking, breakfast, Internet or other fee-based amenities.
At Hyatt Hotels Corp‘s recently opened Hyatt Place Chicago River North, for instance, ask for the “Romance Package” – which, which depending on when you go, can cost $20 a night more than the regular rate – and you will get a bottle of sparkling wine, six chocolate-covered strawberries, a $15 food and beverage credit and 2 p.m. checkout.
“Offering splashy low rates or packages that feature added incentives is an extremely effective way for hotels to generate buzz and lure new business,” says Gabe Saglie, senior editor for Travelzoo Inc.
Similarly, renovations will also spur deals. Last week, the Milford NYC Hotel was offering rates up to 40 percent below normal prices on Travelzoo – with Wi-Fi that usually costs $15 daily thrown in for free – to mark a renovation that is just wrapping up. And the Palms Casino Resort in Las Vegas has weekday room rates of $59 – including breakfast and nightclub passes – following its renovations.
Because hotels typically base their prices and other offers on demand, travelers looking for savings should check hotel websites and loyalty programs and social media. Deals can also be found on travel sites including Hotels.com, Travelzoo.com, Priceline.com and Hotwire.com – the sorts of sites hoteliers turn to when they need to fill rooms.
In New York’s Times Square, where the number of available hotel rooms is swelling, TRYP by Wyndham Times Square South recently offered a rate through Travelzoo that is $110 a night less than the regular “rack rate” and includes two free cocktails.
Growth still below peak
Even with the increase in rooms, growth this year will not be anywhere near where it was at its peak about five years ago. While the full-scale hotel construction boom is probably a couple of years away, the room boost is welcome news to STR director Steve Hennis. Hennis says it is a good sign that more developers are getting their projects financed as the economy improves.
Hotel room prices are still at around 2005 levels, Kolankarai says. And that should not change any time soon because more than 100 of the properties that have opened this year, or are expected to, are either Hilton Worldwide’s Hampton Inn & Suites or InterContinental Hotels Group’s Holiday Inn Express. Prices at these mid-level hotels tend to be more affordable and typically include breakfast and free Wi-Fi – making them attractive to both business travelers and families.
These so-called mid-market hotels are particularly appealing to both travelers and investors because they attract both business people and families. Plus, they can be built far quicker than, say, an urban luxury property.
It typically takes two or three years from the time of a proposal to construction of a suburban Hampton Inn, says Phil Cordell, who oversees Hilton’s Hampton, Hilton Garden Inn, Homewood Suites and Home2 Suite brands. A downtown luxury hotel, by contrast, can take a decade from start to finish, Cordell says.
Hotel development involves a significant investment. The average cost of construction of a single hotel room in the United States in 2012 was $164,000, according to STR. In New York, the average hotel construction cost was $508,000 per room.
New properties get built in places where the occupancy rate is high enough to indicate there is more business to go around. And no city in the United States has more new hotel construction than New York, Hennis says.
This year, the Big Apple will get 22 new hotels – adding more than 5,000 rooms. The two biggest projects are a Holiday Inn in Lower Manhattan with 490 rooms and a Hyatt in Times Square with 487, Hennis says.
By comparison, Chicago has seven projects and Los Angeles and Washington, D.C., have one apiece.
Other areas seeing some growth, according to STR, include Orlando, Florida; Miami; Nashville; Houston; Dallas; and Austin, Texas. The largest area of hotel growth in 2012 was North Dakota, with 23 new properties, which Hennis explains is largely to handle the influx of oil workers.
Copyright (2013) Thomson Reuters. Click for restrictions