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Experts: Expect Lodging Supply Surge

LOS ANGELES-Despite a loss in occupancy, hotels will see daily rates grow by 6.4% in 2007, according to experts sharing their views at the Americas Lodging Investment Summit.

By Maria Wood | Updated on January 23, 2007

Maria Wood is senior editor of Real Estate Forum .

LOS ANGELES-Prepare for an surge in lodging supply. That was the opinion of several experts speaking at the opening of the Americas Lodging Investment Summit, which kicked off here yesterday.

In “Performance and Economic Outlook: Surf’s Up!,” the speakers ventured that a swell of new supply may dampen the industry’s good times. Randell A. Smith, CEO of Smith Travel Research, a leading industry research firm, said that “new supply is coming on fairly rapidly, while demand growth is drifting downward.” He pointed out that demand increased by 1.1% last year, versus 4.2% in 2005. Last year, the amount of new hotel rooms grew by 0.6%, with “a lot more rooms coming on line” this year.

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