In recent years, developers have been warned about a host of economic challenges — labor shortages, increases in construction costs, rising interest rates, higher gas prices, tariffs, NIMBY and a few other headaches.
Somehow, the pace of development in Maine has continued to surprise people.
Take the hotel industry. The man on the street will warn you that it’s overbuilt, that certainly Maine cannot sustain another hotel. And yet hotels keep getting built.
Senior Writer Laurie Schreiber offers a report on the array of hotels in the works right now. Even with compelling reasons not to develop, the drumbeat of new projects continues.
“It’s very hard in this environment, certainly at the national level, for new projects to get built,” says Matthew Arrants, principal of Arrants Co., a hotel investment and consulting firm, told Laurie.
Developers are getting projects done in Maine — and Greater Portland in particular — because the numbers support development and with construction costs lower than other areas.
Interestingly, a decade ago, Arrants predicted the rate of occupancy would fall as more hotels came online.
“It didn’t — so I learned not to guess on that,” he says. “In theory, you do reach a point of equilibrium. But we’ve seen really tremendous growth in demand over the last several years. Things are looking pretty good.”
Hotel development is cyclical, says Sean Riley, CEO of Maine Course Hospitality Group, a hotel ownership and management company in Freeport.
“It’s not like the old days, with a 3% to 4% interest rate, when construction costs were lower and occupancy was skyrocketing,” Riley says. “You need a good site, a good brand, a good developer. It’s not for the faint of heart.”
Elsewhere in the issue, Staff Writer Tina Fischer goes through the recent Legislative agenda, noting which new laws will affect development.
Don’t miss the profiles of MEREDA’s “2025 Notable Projects,” starting on Page 16.
