The amount spent on capital expenditures (“capex”) in the U.S. lodging industry is forecast to reach a record US$6 billion, an increase of 7% versus 2013, according to a study by Bjorn Hanson, clinical professor at the Preston Robert Tisch Center for Hospitality and Tourism at the NYU School of Professional Studies.
Expenditures have increased every year since 2010 after decreases of 40% in 2009 and an additional 18% in 2010 in response to decreasing occupancy, ADR, RevPAR and profits.
The expenditures in 2014 reflect deferred items from 2009 to 2012 and meeting new brand standards, ranging from new or enhanced in-room equipment to redesigned lobbies.
Although total 2013 U.S. capital expenditures were a record, the nominal amount per available room was slightly less (approximately 3%) than in 2008. The 2014 amount will be a record for both real and nominal values.
Previous flexibility on implementing improvements is disappearing, according to Hanson, as brands and management companies are now requiring these improvements to maintain quality and brand standards.
In addition to brand and management company influence over capital expenditures, social media postings are resulting in additional capital expenditures as owners become more aware of and respond to criticisms and unfavorable comments.
These estimates are based on interviews with selected hotel executives (including brand and management company representatives) and design and construction executives, an analysis of brand standards and other sources including press releases and media reports.