LA’s hotel boom continues despite rising construction costs: report

Hotel rooms under construction rose 25 percent in first half of year

Los Angeles /
Jul.July 25, 2018 11:15 AM
Hotel Indigo (Credit: Gensler)

Hotel development, both in L.A. and across California, remained strong in the first half of the year, fueled by high occupancy rates and profitable revenue streams.

In Los Angeles County, the number of hotel rooms under construction has increased 25 percent year-over-year since January, according to a new semi-annual survey published by Atlas Hospitality Group.

There are currently 37 hotels with 5,631 rooms under construction. That’s a sizable increase from the four hotels that have already opened this year, the Los Angeles Times reported.

The growth spurt comes amid a 25 percent rise in construction costs, Alan Reay, president of Atlas Hospitality, told the LAT. Still, that has yet to deter many developers from flocking to the region, where a notoriously tough permitting process has kept supply low.

The boom is being echoed statewide. In California, 183 hotels with nearly 26,000 rooms are currently under construction, reflecting a roughly 40 percent increase from the same time last year.

Orange and San Diego counties posted some of the largest upticks, rising 100 and 81 percent, respectively, in the first half of the year.

A January report from Atlas Hospitality reported there would be as many as 10,000 new hotel rooms coming online in the next few years. That figures to be a conservative estimate, considering developers had laid out plans to build 33,500 rooms in L.A. alone. [LAT] — Natalie Hoberman


Related Articles

arrow_forward_ios
Ardie Tavangarian sells Pacific Palisades spec mansion for record $83M
Ardie Tavangarian sells Pacific Palisades spec mansion for record $83M
Ardie Tavangarian sells Pacific Palisades spec mansion for record $83M
Senate Majority Leader Toni Atkins (Getty, iStock)
Affordable housing bills stall over union labor requirements
Affordable housing bills stall over union labor requirements
State Senator Scott Weiner is the primary author of Senate Bill 9 (Getty, California Legislative)
Study: California’s “upzoning” bill would not lead to widespread redevelopment
Study: California’s “upzoning” bill would not lead to widespread redevelopment
(Getty / Photo Illustration by The Real Deal)
Couple fined $18k for bulldozing recently protected Joshua Trees
Couple fined $18k for bulldozing recently protected Joshua Trees
Rendering of the project (NMDA for CIM Group)
CIM drops residential units at proposed West Hollywood hotel
CIM drops residential units at proposed West Hollywood hotel
Downtown Burbank's Transit Oriented Development Specific Plan (Photo via Downtown Burbank TOD/City of Burbank)
Burbank’s downtown specific plan could add thousands of units of housing around its Metrolink station
Burbank’s downtown specific plan could add thousands of units of housing around its Metrolink station
A rendering of the project with East End Capital managing principals Jonathon Yormak and David Peretz. (Relativity Architects, East End Capital)
East End Capital to convert cold storage into movie studio
East End Capital to convert cold storage into movie studio
(Proper Hotel, Google Maps)
Downtown LA’s Proper Hotel to open in July after years of delays
Downtown LA’s Proper Hotel to open in July after years of delays
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...