Why 2018 May Be A Good Time For Expanding Your Hotel Business

Interior of a hotel bedroomIf you need hotel business loans in California or Florida for an expansion plan, it may be a good time to shop around this year.

CBRE said that U.S. hotels had recorded higher profits in 2017, even if revenue growth has slowed down. On the other hand, the industry’s performance metrics between January and March have increased year over year, according to STR.

Key Metrics

STR said that occupancy in hotels nationwide rose 0.9% to 68.5% for the first quarter of 2018. Average daily rate (ADR) and revenue per available room (RevPAR) also increased 3.0% to US$131.56 and 3.9% to US$90.17, respectively. The ADR for the three-month period represented the highest growth since January 2017. By market, the biggest growth in ADR and RevPAR occurred in Miami-Hialeah, Florida, while hotels in Philadelphia recorded the biggest occupancy growth.

These numbers should be a good enough reason to expand business operations, especially in light of the recent federal tax reforms. Despite challenging conditions, the industry has been able to record the biggest profit margin since 1960, according to CBRE.

Tight Job Market

The industry’s ability to handle labor expenses served as one key reason for the impressive profit margin, said John Corgel, senior advisor to CBRE Hotels’ Americas Research. Since labor accounts for the largest expense among hotels, most companies have struggled to fill in roles.

Bureau of Labor Statistics data showed that the rate of vacancies in the industry is at 5.3%, which is the same percentage of the number of current employees. The high rate of job openings partly stems from a lack of skills and qualifications among job applicants.


Whether you need to refinance debt, hire more employees, or simply need additional capital for operations, an ARF Financial business loan for hotels will be useful for these purposes. What is your strategy for this year?