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Michael McLellan

Hotel construction boom continues, Wi-Fi and breakfast included

by Michael McLellan | Dun & Bradstreet Editor

March 19, 2013 | No Comments »

Hotel ConstructionBIZMOLOGY — The hotel construction craze of recent years shows no signs of slowing down anytime soon. Hotel developers are still bullish, especially in Europe and in hip American urban markets.

Austin, Texas, has at least 10 new hotels proposed for its downtown area, according to the city’s Planning and Development Review Department. Austin’s growing reputation as a world-class destination for visitors attending various events, festivals, and conventions has resulted in hotel development increasing dramatically.

Currently there are about 8,000 hotel rooms in downtown Austin. The proposed projects would represent a 35% increase in the number of available rooms.

The trend in other American cites like Chicago and Portland has been chic boutique hotels. Companies such as Kimpton Hotel & Restaurant Group, which owns 12 boutique hotels and manages about 40 others, have been buying up older buildings in urban areas and transforming them into four-star hotels that feature mostly smaller, European-style accommodations.

Kimpton’s recipe for success involves emphasizing its highly personalized care, stylish hotels, and destination restaurants. It has placed itself among a growing market that targets affluent travelers who prefer the hip and trendy over traditional hotel brands. Similar companies with this strategy include Ian Schrager Company and Morgans Hotel Group. Many of the Kimpton hotels have been given European-sounding names such as Hotel Monaco in Chicago.

In Europe, the race is on to build modern yet low-cost rooms to replace aging and outdated accommodations. Even IKEA, the company famous for stylish and modern prefabricated furniture designed for tight spaces, recently announced plans to partner with Marriott International to build a new 50-unit hotel chain under the brand name Moxy. IKEA will invest about $500 million to build the hotels in Europe between now and 2018.

Back in the US, even far-flung places like North Dakota have seen a spike in hotel building. In 2012 the state had more than 40 hotels go up, adding 3,500 rooms. Officials there expect an equal number of hotels to be built in the state this year.


Photo by James Willamor used under a Creative Commons license.

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