Dive Brief:
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Hotel and motel construction is likely to increase this year as disposable income increases, according to a report from market research organization IBISWorld.
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The industry began to recover in 2012 as consumers and businesses grew more optimistic about the economic recovery and hotel room occupancy rates started to improve. This year, the report noted, the industry is expected to grow by 12.3%.
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In addition, the price of hotel rooms is rising, which is a sign of increased demand and higher profit margins.
Dive Insight:
The positive news comes after a challenging few years for the hotel industry, when limited disposable income muted domestic tourism and business travel, which resulted in less demand for hotel rooms. As a result, hotels and motels delayed plans to expand and put off building new facilities. That, in turn, greatly slowed demand for contractors specializing in hotel construction.