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NEW YORK CITY-At the recent NYU’s International Hospitality Industry Investment Conference, the point was continually made that it’s the opportune time to build hotels, due to readily available construction financing and the large number of companies focused on increasing their presence in New York City.

The reason for this optimism is that hotel values are now higher than their replacement cost in part because of the paucity of planned developments during the Great Recession. A tremendous growth in both business and tourist travel since then, and the replacement of much of the wealth that was lost between 2008 and 2010, has resulted in more tourists coming to New York. In 2012 the lines representing the cost to build versus the value of hotel rooms crossed and, for the first time since briefly in 2007 and prior to that between 1996 and 2002, the cost to buy luxury hotel rooms is higher than the cost to build them. This is also true of the Upper Upscale segment, and the Upscale segment. Moreover, even the value of rooms in the economy segment is likely to exceed the cost to build them by 2015.

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