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While this is true, it conviently leaves out the important question: Who pushed for those regulations? Many of those regulations that affect hotels were pushed

by _red 10y ago

While this is true, it conviently leaves out the important question: Who pushed for those regulations? Many of those regulations that affect hotels were pushed by the large hotel groups - regulation is simply the most cost effective way for large multinationals companies to keep out competition. The regulation act as a floor that essentially ensures that only projects of $X millions of capitalization makes sense to pursue, which by default favors the large hotel chains.

Spooky23 10y ago
That's a common argument that really doesn't hold any water. The average mid market hotel (Holiday Inn, Hampton Inn) costs $50-75k per room to build, with the typical project costing $6-8M. Nearly all hotels like this are built from standardized components and are owned by small local or regional operators. If you go downmarket, that cost goes in half. If you look at older, but still legally compliant hotel property, acquisition cost is probably $5-10k/room in many markets. Obviously big city hotels costs more to build/buy and operate. That's why a NYC hotel is often 2x-3x other places -- and that is being challenged by lower operating cost business models. The large hotel chains don't own a lot of property. They are brands who license their trademarks and access to their reservation system.