Home›Real Estate›Industry›Rising costs curb ground-up hotel development in Charl…

Rising costs curb ground-up hotel development in Charlotte

Most select-service hotel build-outs in the U.S. cost $215,000 to $325,000 per key, and upscale, full-service projects can exceed $600,000 per key, tightening feasibility in Charlotte.

Reported · Written up by our desk · Industry

Hotel development in Charlotte has stayed sparse despite a post-pandemic recovery in travel and hospitality, as elevated costs and financing challenges weigh on ground-up projects, according to Bisnow citing the Charlotte Ledger.

Developers and investors face higher borrowing and construction costs, including labor and materials, with the pressure intensified by increasingly expensive land in prime metro areas.

Bisnow also notes that U.S. development expenses vary by hotel type, with most select-service build-outs running $215,000 to $325,000 per key, while upscale, full-service hotels can cost more than $600,000 per key.

Even with demand, revenue growth is under pressure, as Bisnow reports that RevPAR is sliding across every Charlotte submarket and that nationally the industry posted a 10.4% year-over-year RevPAR increase last week, according to CoStar News.

More like this

Sources