Search
 

Reality For Hotel Investing

Looking carefully at the indutry numbers is required before investing

By Joel Ross | Updated on March 16, 2014

The Congressional Budget Office has reduced the forecast of potential GDP growth through 2020 by a substantial amount. The IMF has forecast slow to moderate growth for the world economy for the same period. There is, at the moment, little to suggest that 2014 is going to be a good year or that GDP growth will exceed 3%, which is not good at this stage of a recovery. There are fears of deflation in Europe, although that is not likely, it is possible. Millions of baby boomers are now retiring, and the long term unemployed and the number of part time employed is growing as Obamacare and now higher minimum wage rules and new overtime rules further reduce hours worked for many.

The financial services industry continues to get hammered by this administration who seems to think it is good politics to levy huge fines on JP Morgan, B of A and others. They don’t seem to understand that these fines are a transfer of working capital form job creators to the government, and so the result is thousands fewer jobs in the industry, less spending on T&E, less spending in general by tens of billions.  The huge added compliance costs further strain budgets at banks for thousands of useless people to fill out useless forms that nobody will ever read. These are all costs that could instead be going to loans and lending officers. The cost of doing any transaction has risen for all of this unproductive paper pushing. That leads to further reductions in productive revenue production, spending on supplies, travel, marketing and lots of other things which add salaries, loans and other productive uses of capital.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.