US Lodging Cap Ex to Hit Record in 2016

Dr. Bjorn Hanson, clinical professor at the NYU School of Professional Studies—Jonathan M. Tisch Center for Hospitality and Tourism.

NEW YORK CITY—The amount spent on capital expenditures for the US  lodging industry is forecast to be at a record level of $6.6 billion in 2016, approximately $1,350 per available room, according to a new report. Capital expenditures have increased every year since 2010 states the research by  Dr. Bjorn Hanson, clinical professor at the NYU School of Professional Studies—Jonathan M. Tisch Center for Hospitality and Tourism.

Capital expenditures are costs incurred with the purchase and installation of capital assets to maintain and enhance hotels. For example, wall covering and carpeting are generally included, but painting is generally not.  New construction, room additions, and “rebuilding” a hotel to be a significantly different property are not included as capital expenditures for this analysis. The cost of many new brand standards—such as redesigned lobbies, new bedding, and converting tub/shower combinations to walk-in showers—are capital expenditures.