U.S. hotel owners for the second straight year will spend a record amount of money on capital expenditures, according to Bjorn Hanson, clinical professor at the NYU School of Professional Studies Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management.
Capital expenditures are expected to rise about 7% this year, to $6 billion.
Hotel owners will invest in amenities such as redesigned lobbies and faster Internet, as well as in-room features like coffee makers, ironing boards and MP3-compatible sound systems.
Last year, hotel owners spent about $5.6 billion on capital improvements, exceeding the previous record high of $5.5 billion in 2009. With research firm STR pegging U.S. hotel inventory about 5 million rooms, hotel owners will spend on average about $1,200 per room on improvements this year.
The expenditures are spurred by a combination of improving revenue and the proliferation of social media, in which guests can more easily convey their praises and critiques of hotels.
Through the first half of the year, U.S. hotels’ revenue per available room rose 7.5% from a year earlier, as occupancy advanced 2 percentage points to 63.7% while room rates rose 4.1% to $114.06, according to STR.