PERSPECTIVE

Scarcity of new supply fuels urban gateway hotel investment

Contributed by OPHELIA MAKIS , SR . RESEARCH ANALYST , JLL HOTELS AND RETAIL CAPITAL MARKETS

Concerns over significantly high hotel supply growth in urban gateway markets , including New York City , Boston , Washington , D . C ., and Los Angeles , have subsided post-pandemic . These markets , popular locations for firsttime U . S . travelers , have historically led the nation ’ s hotel pipeline activity . In fact , their aggregate supply growth reached a peak of 3.4 % in the previous cycle . This , however , has since shifted significantly postpandemic amid high construction costs and stringent government regulations . As of the first half of 2024 , their aggregate supply growth was 1.7 %, 170 basis points below the last cycle ’ s peak .

In 2024 , U . S . urban gateway hotel supply growth has so far remained well

40 hotelsmag . com Oct / Nov 2024