Rising costs to challenge future California hotel development

2019-01-25 Tag: California hotel

California hotel,Rising costs to challenge future California hotel development

The number of new hotel openings in California should keep its steady pace for the next few years, but the rising cost of development should slow that pace as early as 2021, writes HNN’s Bryan Wroten.

Alan Reay, president of Atlas Hospitality Group, said the hotels that opened in 2018 and on schedule to open this year and next started years ago before development prices skyrocketed, which means there will likely be fewer owners and developers starting or completing new projects.

“We are starting to see some clients with sites tied up, some with nonrefundable money, walk away from those projects just because of the huge front-end construction cost,” he said. “Those already under construction and financed, those will get built.”

 



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