According to a recent trend analysis report by Bjorn Hanson, clinical professor at the NYU School of Professional Studies Tisch Center for Hospitality and Tourism, capital expenditures (CapEx) within the U.S. lodging industry is forecast to reach $6.4 billion this year—a 7 percent increase from the $6 billion spent in 2014.
This amount represents continued growth for CapEx, which has increased every year since 2010.
The report notes that recent brand CapEx programs include bathroom revamps, enhanced fitness facilities, and reimagined lobby concepts geared toward Millennial travelers. Despite continued investments in improved A/V equipment for meeting and function rooms, A/V outsourcing remains a popular trend and allows hotels to generate a commission from providers.
Increased CapEx may additionally relate to a heightened awareness of critiques on major social media outlets, which, since 2012, have proven a significant forum for hoteliers to quickly identify needed changes.
A portion of CapEx from the past year also reflects deferred upgrades from 2009 to 2014, when many brands and management companies allowed for a period of expenditure flexibility given the economic downturn; that period ended for many companies between 2013 and 2014.
