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Amerihost Properties, Inc. is definitely bullish on new lodging development. The Illinois-based developer, owner and operator will open or start construction on 17 or 18 new properties this year, all in the limited-service segment and most carrying the Amerihost brand. "Building new makes a lot more sense to us than buying existing properties, " says President Michael P. Holtz. "There is generally more risk involved in operating older properties, and often it is a difficult marketing challenge to overcome a hotel's past reputation, "
Holtz also believes that new properties are cheaper to operate. For example, energy costs in a new property are about two percent of sales versus nearly five percent in an existing hotel. Similarly, maintenance costs for a new property are only about one-fourth of what they are in an older facility.
Another factor is the recent rise in prices of existing hotels. "It made some sense to buy...