Comments on: Tourism Lobby Turns Positive Into Negative http://www.traveltrends.biz/ttn555-tourism-lobby-turns-positive-into-negative/ Incorporating TRAVELtech and No Vacancy Wed, 19 Jun 2013 06:39:42 +1000 http://wordpress.org/?v= hourly 1 By: Dean Dransfield http://www.traveltrends.biz/ttn555-tourism-lobby-turns-positive-into-negative/#comment-4183 Dean Dransfield Wed, 26 Oct 2011 00:31:08 +0000 http://www.traveltrends.biz/?p=5477#comment-4183 The topic becomes confused because there are two issues that need to separated. Existing vs new hotels. The return on existing hotels has been good and will continue to be good as they were nearly all acquired at a discount which was substantial. Should there be incentives for new hotels and when are they developable? The first is a social/political issue about tourism infrastructure and I think there is a case for it no different to airport and road infrastructure. It can be informed by the second where I suspect a level of incentive that benefits the community is acceptable but not one that transfers wealth to evil developers. DHR has a well advanced development index methodology that indicates where rates need to be in each city to justify development for each type of hotel and compares them to where they are now together with a prediction of when the trigger would be reached. We have put the project on hold because the initial results were fairly far from the green zone and there is little debt or equity capital interested in new build vs existing. We decided to put our resources elsewhere but may revisit. The topic becomes confused because there are two issues that need to separated. Existing vs new hotels.

The return on existing hotels has been good and will continue to be good as they were nearly all acquired at a discount which was substantial.

Should there be incentives for new hotels and when are they developable?

The first is a social/political issue about tourism infrastructure and I think there is a case for it no different to airport and road infrastructure. It can be informed by the second where I suspect a level of incentive that benefits the community is acceptable but not one that transfers wealth to evil developers.

DHR has a well advanced development index methodology that indicates where rates need to be in each city to justify development for each type of hotel and compares them to where they are now together with a prediction of when the trigger would be reached. We have put the project on hold because the initial results were fairly far from the green zone and there is little debt or equity capital interested in new build vs existing. We decided to put our resources elsewhere but may revisit.

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