With Prices of New Hotel Construction Soaring, Can You Ever Make Money Again?
By Nitin Shah Chairman & CEO, Embassy National Bank | October 21, 2012
"If you can afford to build, now is the time to do it."
"This is absolutely not the time to build anything, especially a hotel, when you can buy for much less."
Go to almost any industry conference, association meeting, or business networking event and you will hear opinions like these that are very passionate and very polarized – some people are firmly in favor of new development, while others are equally convinced that the right strategy now is to buy or to buy, renovate, and reposition.
Typically in any debate or discussion, opinions are based on perspective – in this case, a hotel owner will view the situation differently than a franchisor or a lender, and therefore will probably arrive at a different conclusion.
My perspective is somewhat unique in that I am simultaneously a hotelier, a franchisee, and a banker.
I have owned and operated hotels since 1984, while for the past five years, I have concurrently served as Chairman and CEO of a community bank in Atlanta. Our bank has grown to almost $100 million in assets and is one of the leading lenders to small business owners – including hoteliers – in the southeastern United States.