After a Slack Period, Hotels Are Sprucing Up

Sep 26, 12 | 12:04 am

By Jane L. Levere

Hotel owners in the United States are increasing their spending on improvements to their properties this year, upgrading guest rooms, restaurants, technology and other amenities.

Evan McGlinn for The New York Times

The renovated lobby at the Fairmont Copley Plaza in Boston.

A new survey of owners estimated that spending would reach $5 billion this year, the most since 2008 and up from $3.75 billion last year, said Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University and author of the survey. Capital expenditures fell to $3.3 billion in 2009, in the depths of the recession, and dropped further, to $2.7 billion, in 2010, he said.

These estimates do not include spending for hotel expansions or major changes that result from moves like switching brands.

The slowdown in improvements came at a price. According to J. D. Power & Associates' 2012 North America hotel guest satisfaction index study, released in July, guest satisfaction with hotel rooms had fallen to 752 points on a 1,000-point scale, from a high of 770 in 2007, while satisfaction with "hotel facilities" was 758, a seven-year low.

Many factors account for the increased spending in brands like Crowne Plaza, Courtyard by Marriott, Staybridge Suites, Hyatt and Westin. With the industry's continuing recovery - occupancy this year is at its highest since 2007 and rates are at their highest since 2008 - owners can more easily afford upgrades.

Henry Harteveldt, a travel analyst and co-founder of Atmosphere Research Group, said hotel owners were also investing now because travelers were no longer beholden to a particular brand. An Atmosphere study last year found that only three in 10 American travelers were loyal to any hotel company. Hotel owners, Mr. Harteveldt said, "know they have to start investing in guest rooms, restaurants and public spaces if they want to sustain price increases and hopefully achieve more."

Also, travelers now expect to find hotel rooms equipped with the same amenities that they have at home, whether it is a flat-screen television, Wi-Fi or broadband Internet access, said Steven Kent, lodging analyst at Goldman Sachs.

And the growing popularity of social media puts more pressure on owners to properly maintain their investments. "Social media make all flaws public," Mr. Harteveldt said."There's no hiding behind an out-of-style dust ruffle anymore."

Source for full article: The New York Times