By some accounts, the hotel industry is in need of additional supply to absorb growing demand, and investors are stepping up their activity in response. One such investor, The Lightstone Group, is committing $2 billion to developing and investing in lodging properties.
Bloomberg reported that Lightstone is targeting select-service properties in proven U.S. markets, and is teaming up with Marriott International to build five Moxy hotels in New York -- four in Manhattan and one in Brooklyn. Lightstone plans on spending $1 billion on Moxy-branded hotel development, and $1 billion more towards hotel investments in other areas of the U.S.
“We spent time evaluating many brands and concluded that Marriott is the best brand partner for our developments,” David Lichtenstein, chairman and CEO of The Lightstone Group, told Bloomberg. “Residential has exceeded prior peaks. Industrial has come roaring back. Office has lagged for good reason. Hotels are coming back and coming back strong.”
According to The Real Deal, Lightstone is not waiting around to start development. Within 90 days, construction on a Moxy hotel on 36th Street and Seventh Avenue in New York will begin.
In terms of overseas development, The Wanda Group revealed at the end of January that it would invest $1 billion in a mixed-use complex in Sydney, Australia. According to The Australian, The Wanda Group revealed it will spend an additional $3 billion on the Australian hotel industry on top of its existing developments in Sydney and on the Gold Coast.
Federal Trade Minister Andrew Robb told the Australian that the tourism industry must develop 16 luxury hotels every year until 2020 if it wants to keep pace with the growth of inbound tourism.
“The world is in fact awash with cheap capital in search of a home and aggressive investment attraction is one of my key goals for 2015,” Robb told the Australian.