Hampton Hotels Latest in Hospitality Sector to Grow
- Mar 19, 2009
The hospitality sector continues to move forward, with Hampton Hotels the latest to tout its progress. For Hampton, it is the opening of 152 new properties in 2008–the second largest number of hotel openings within a single year during Hampton’s 25-year history. The firm is not stopping there, with plans to add another 150 hotels to its portfolio in the coming year. And Hampton is far from only chain with expansion plans despite the struggling economy.On March 11, CPN reported that InterContinental Hotels Group (IHG) partnered with Crocus Group to build the world’s biggest Holiday Inn in Moscow as well as build a 17-story 192-room InterContinental Hotel in Edinburgh, due to open in 2013. The hotel will bring InterContinental to Scotland for the first time as part of a partnership with Tiger Developments to regenerate the Haymarket area, creating offices, restaurants and shops. The Moscow project garners IHG an investment of more than $100 million from Crocus. “The success of 2008 places us in an excellent position for continued growth, even during these more challenging times,” said Phil Cordell, global head, Hilton Focused Service and Hampton Brand Management, said in a prepared statement. Hampton’s executives stated that development activity and interest in Hampton overseas is emerging as a “significant growth opportunity,” according to a prepared statement. “As familiarity with the Hampton brand grows, we will expand at a steady rate outside the U.S with all Hampton by Hilton has to offer,” a Hampton release stated. While it may seem counterintuitive to start building hotels in the uncertain economy, starting projects now or in the near future may be “forward looking,” Terry Clower, associate director for the Center for Economic Development and Research at the University of North Texas, told CPN earleir this month. While travel spending is down now, Clower said investment decisions like these are not based on what is going on right now, but what may be happening in one to two years from now. “A hotel starting (construction) today isn’t planning to open next week,” Clower told CPN. “If you have the financial capacity to move forward now, the time is right because you can get more competitive bidding for construction and materials. So, it is not a bad time to build.” “Looking ahead, we are finding that many of our owners, developers and industry consultants are forecasting business to pick up toward 2010. While securing finance can be challenging today, we have a long-term view of development and will look to take advantage of more attractively priced, land, materials and labor,” according to a Hampton statement. Concord Hospitality Enterprises Concord president & CEO Mark Laport told CPN on Jan. 29 that this is an excellent time to develop. Interest rates are at rock-bottom levels, land prices have come down, and construction material prices have also moderated. In addition, architects are less busy than they were during the boom years, so design plans can be finished quickly. Also, contractors are now looking for work, and competing with each other on price, a good situation for a developer. Concord recently secured a $13.4 million loan to build a 124-room Courtyard by Marriott in Pittsburgh and has 11 hotels under construction, CPN reported.