Pace of U.S. Hotel Development Is Being Threatened by Global Shipping Bottlenecks
Photo Credit: Competition over raw materials and available shipping containers are slowing down hotel development in the U.S. Pixabay / Julius_Silver
Skift Take
The surprising rise in consumer spending during the pandemic spurred a competition for goods and shipping containers among all industries. That's a long-term problem for hotels, especially with an expected increase in renovations around the corner that will require even more deliveries from overseas.
Rising lumber prices, manufacturing slowdowns, and a shortage of shipping containers is a perfect storm of issues threatening construction costs and timelines for U.S. hotel developers.
Random length lumber commodity costs were up nearly 271 percent from last year, just before the close of trading Thursday. Real estate developer Trinity Investments reports shipping container costs this week were up 614 percent from 18 months ago. Hotel furniture and equipment suppliers say there’s as much as an eight-week delay on upholstery and three months on larger goods.
None of these problems are expected to go away anytime soon, especially since there’s an expected wave of hotel renovations — put off during the pandemic — finally expected to take place across the U.S. over the next four years.
“If you're not prepared, and you're not planning for the disruption, you're going to get smoked right now,” said Joe Ward, vice president of asset management at Ohana Real Estate Invest
