In China and India, dozens of openings have been announced. Three Sahngri-La hotels are expected to open in Beijing, Gulin and Shanghai, and on the sub-continent Starwood Hotels and Resorts alone has a dozen projects in the pipeline, including three Aloft and one Westin. Investors are also interested in Old Europe and Northern Europe. Shangri-La is coming to Paris, Banyan Tree to Mexico, while Sheraton and W are expanding in New York. And these are just a few examples. Some observers see this frenzy as a form of audacity, even recklessness. For the leaders of the hotel groups, it is simply a matter of strategic common sense. The projects were already in the pipeline before the crisis, and to back out now would send out very bad signals to the market. What's more, the crisis will not last forever, and conceding a lead to the competition is out of the question. So much the worse if we have to tighten our belts for a few more months.
The increase in hotel capacity is not without consequences for room prices. In cities such as New York, Paris, London and Moscow, where demand was barely being met before the black September, the fall is likely to remain moderate. On the other hand, in other cities such as Singapore, the arrival of new players will lead to overcapacity. After 18 months of promotions, it will be difficult for the top end of the hotel market to return to the prices charged in 2008.
