Slow small town growth hinders hotel industry

The hotel industry as a whole has reversed its fortunes after the dismal year that was 2009. We’ve mentioned this a few times already. It’s not going to be easy, but soon we hope to hear that our friends in the industry in all locations get back and righted before it’s too late.

We say “in all locations” because an unfortunate trend is slowing the overall recovery. Small towns have not been as fortuitous in the returning guest rates that cities such as New York or Chicago have seen.

This Bloomberg story illustrates that even though the industry has seen improvements, much of that can be attributed to hotels in large markets. New York City for instance has 514 hotels, which only makes up just a shade below two percent of the US room. Yet those same hotels comprise six percent of the revenue share. On the opposite side of that coin, of the $3.8 billion lenders have in foreclosed hotels, 86 percent of those are in secondary markets.

With big city hotels skewing the numbers on the rebound from the recession so greatly, it can be easy to overlook the fact that not everyone is experiencing the same return to form. Secondary markets must continue to innovate and adapt since they are so much more vital to their respective areas.