Commercial real estate investors in Kansas may want to consider investing in hotels. The hospitality market is currently on an upswing as changes in the economy are triggering more demand for hotel rooms. According to a report from PwC, 2015 hotel occupancy rates are expected to reach 64.9 percent, which is the highest they have been since 1984.
One of the factors that is helping the hotel market to soar is corporate profit growth. As corporations make greater profits, there is more demand for group booking by corporate groups. Group booking, or blocks of at least 10 rooms booked together, makes up one-third of hotel occupancy. RevPAR, or revenue per available room, increased by 8.2 percent in 2014, and it is expected to increase by 7.4 percent in 2015.
While demand for hotel rooms is growing, there are some significant changes in what hotel guests are looking for. The most popular hotel type is upscale select service that caters to business travelers with fewer amenities and lower costs. Today’s hotel guests like to spend more time in common areas, so hotels are focusing on creating comfortable lobbies with Wi-Fi. When booking hotel rooms, guests do not have as much brand loyalty as they used to, and they are more likely to book rooms in boutique hotels.
Investing in a hotel could be very profitable, but it is a big undertaking that requires extensive planning. If commercial property developers have any zoning issues with respect to a prospective hotel property, an attorney may be able to help. Legal counsel may also be able to assist a commercial real estate investor by negotiating, drafting and reviewing contracts.