After taking a painful shellacking in the last recession, the international hotel market has roared back with such vigor that more growth is expected in 2015 as new investors buy or build hotels, a report said.
Both business and leisure travelers are booking rooms again, leading to an expected 3.9% increase in money spent on international travel and tourism this year, consulting firm EY said. Hospitality will be increasingly recognized as a key driver of economic growth at the local, regional and global levels.
Many of the new investors in hospitality are from China and other Asian countries including Japan and Singapore. In Los Angeles, Asian investors spent $844 million buying sites for development during a 12-month period that ended in October.
One of the largest projects now underway in downtown Los Angeles is the $1-billion Metropolis hotel, retail and condominium development being built by the U.S. subsidiary of Shanghai-based Greenland Group. Another $1 billion hotel and office tower is being built just a few blocks away by Korean Air.
Los Angeles is a favorite market among Asian investors, but Manhattan, Hawaii and London lead the pack with 48.5% of total Asian hotel investment globally through October.
“We expect the hospitality industry to experience significant growth, development and brand expansion in the coming year,” said Michael Fishbin, leader of EY’s hospitality and leisure practice. “Despite some significant head winds -- such as geopolitical instability, new health concerns and inconsistent economic growth -- the global industry is thriving and optimism prevails.”