Hotel Conversions: Will This Be The Next Trend?
There has been a lot of discussion about the number of distressed hotels in the marketplace and their fate once financing returns. During this discussion, the topic of hotel conversions naturally arises. Before considering a hotel conversion, it’s important to understand the current hotel supply, room supply and room revenue. For example, the luxury chain scale represented 1 percent of the U.S. hotel supply and 6 percent of the hotel industry room revenue year to date ending April 2009. Compare that to the economy chains, which represent 20 percent of hotel supply, yet only 7 percent of the industry’s room revenue.