BLLA speaker: Boston, Chicago, L.A. among cities on verge of peak room supply

The Chicago skyline.
The Chicago skyline.

Boston, Chicago and Los Angeles are among U.S. cities whose room supply will reach all-time highs within the next couple of years, according to a presentation on Wednesday at the Boutique Lodging & Lifestyle Association's (BLLA) Leadership Symposium.

Boston, Chicago and Houston will reach all-time supply peaks next year, while 2017 will mark room inventory highs for cities like Los Angeles and San Francisco, HVS Managing Director Kasia Russell said at the conference, which was held this week at the Fairmont Miramar Hotel in Santa Monica, Calif. Overall, the U.S. development pipeline includes about 430,000 rooms, which accounts for about 8.6% of the current U.S. inventory.

The development activity is in response to demand levels that have outstripped slow supply increases in recent years. As a result, U.S. hotel-room occupancy will likely reach 67% this year, surpassing the previous peak of 64.8% in 1995.

And much of that development activity is via hotels planned for boutique brands overseen by the world's largest hoteliers, including Marriott International's Autograph Collection, InterContinental Hotel Group's Kimpton Hotels & Restaurants, and Choice Hotels International's Ascend Collection.

With some current travelers opting for home-based accommodations, such as those listed on Airbnb, because of either lower prices or a less standardized experience, Russell noted that the impending supply increases, especially in the boutique sector, may slow Airbnb's growth.

"We'll be able to recapture some of those guests with the new inventory," she said.
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