Increased construction costs and similarly elevated cost of debt has made it difficult to build new hotels, but Hyatt's Dan Hansen said he is hopeful that will all change this year.
Speaking with Hotel News Now at the 2024 Americas Lodging Investment Summit, Hansen said he believes this could be the year when new development can pencil once again.
"I think 2024 is the inflection point," he said. "If I look back over my career, you know the deals I did — the renovations, the developments — the ones I did when times were tough all did well. The ones I did when times got better started to be a little more challenging."
Many market watchers have said this will be the year the Federal Reserve starts cutting interest rates — at least somewhat — and that could boost new construction significantly.
"We're finding a lot of developers that see a stabilization in construction," he said. "Cost stabilization and an outlook of lower interest rates. I think that is getting people excited about taking that next step and signing a franchise agreement, tying up land and really getting started."
Over the past year, Hansen has led the launch of Hyatt Studios, which is a driver of both pipeline growth at Hyatt Hotels Corp. and the World of Hyatt loyalty platform. He said despite construction challenges, interest has been exceedingly high, and the brand has proven to be the growth driver they hoped it would be.
"It's certainly the fastest growing brand we've ever had at Hyatt, and it compounds these positive effects of the loyalty program, which has quadrupled in the last five years," he said.
For more from HNN's interview with Hyatt's Dan Hansen, watch the video above.