Hotel fundamentals will continue improvement says E&Y report

26 Jan, 2012

The improved hotel fundamentals that started in 2011 should carry through 2012 says Ernst & Young in its latest Global Hospitality Insights report—even in the face of an uncertain global economy. "The conventional wisdom suggests that key fundamentals should be on the wane, but that has not happened yet and, due to many factors, we don't believe it will occur in 2012," said Michael Fishbin, Ernst & Young's leader of Global Hospitality Services. Fishbin does caution hoteliers to remain vigilant and not have a false sense of security. Fishbin contrasted hospitality markets in developed economies, such as the U.S., with some developing economies such as China and Brazil, where construction has been very active. In the U.S., the construction of new hotels has historically averaged around two percent per year but is projected to be less than one percent per year for the time being, leading to demand outpacing supply for the foreseeable future.