Could California Have Too Many Hotels in the Works?

The Real Deal

Could California Have Too Many Hotels in the Works?
By Cathaleen Chen

Could California have too many hotels in the works?

California developers may be overdoing hotel construction.

More than 17,000 hotels rooms are under construction in California, nearly 40 percent of which are in Los Angeles County, according to a new report by Atlas Hospitality Group cited by the L.A. Times. The volume of hotel projects has some experts wondering if supply will begin to outpace demand.

Developers rushed into L.A.’s hotel market en masse over the past few years, enticed by high occupancy rates and revenue and room rates that had surpassed pre-recession levels. But too many may have had the same idea at once, Atlas President Alan Reay told the Times.

Of the 563 hotels in the planning stages statewide, he expects only 20 percent will ultimately get built. In L.A. county alone, 6,772 rooms and 37 hotels are under construction.

“If we look back in history, we can see we’ve gone through a number of booms and busts where we’ve added too many rooms,” Reay said.

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