The market for hotel rooms here in California appears to be growing at an increasing rate. Investors know this and always look for smart purchases that make good investments. Recently, sources indicate that the development of a new hotel is costing approximately the same as buying one already built.
The sudden increase in demand for hotels seems to revolve around the state's growing economy. An influx of tourists and business travelers are behind the demand. Profits and revenues have reached record proportions for hotels across California.
Their construction has increased an impressive 28% according to the Atlas Hospitality Group. In 2018, around 26 hotels opened their doors for business in the first half of the year. This year, that number went up to 36.
With the rise of commercial development in downtown Los Angeles, a hotel boom is underway. Part of the reason boils down to incentives and tax rebates offered by the city. Here in Orange County, two new hotels are already open and 17 more are in various stages of construction. Two are luxury hotels, and the 6% increase may result from Disney's addition of the Star Wars attraction. Orange County is also offering tax rebates to developers.
This may all sound like good news for those looking for a place to start a new development. The problem is that the market can quickly become saturated with every boom, which drives prices back down. For this reason, getting in on the current hotel and other construction trend now may be a good idea. Before doing so, understanding the market, one's legal options and other aspects of a potential project would be invaluable.