After more than a year of weak oil prices, the fallout of roomnight demand in oil-producing areas has waned as supply growth continues its strong upward momentum, which means more trouble ahead for hoteliers. According to Hotel News Now, the decline in demand can easily be traced back to the price of oil. As oil prices hovered around $100 per barrel, new oil and gas wells needed additional workers and offered employment for many. But the lack of accommodations in the rather undeveloped areas of the U.S. forced workers to, in the beginning, sleep in their cars and then in “man camps” until finally hotel development caught up with the rapid demand. But as much as room demand increased when oil prices were high, it waned quickly when oil prices, and thus production and employment, decreased rapidly in 2015. Room demand changes in the submarkets* that are primarily driven by the oil and gas industry have been negative since March 2015 and decreased more than 10% successively in the last three months ending January 2016. The negative impact of the last few years is only the latest roller coaster change in revenue per available room as the oil prices and supply additions caused hoteliers euphoria in the mid-2000s and heartburn in the more recent past.
A West Virginia committee studying tax reform is weighing options of cutting or eliminating certain taxes, and one senator said the business personal property tax may be the "sweet spot" of the discussion. Jared Walczak suggested that tangible personal property taxes and business inventory taxes hurt the state’s chances for attracting new businesses, as other states are “increasingly going toward eliminating” those taxes and West Virginia is one of only 10 states that taxes inventory. However, because those taxes are set in the state’s constitution, it would require an amendment voted upon by taxpayers.
Property taxes paid to counties and municipalities by the proposed Atlantic Coast Pipeline would exceed $25 million a year, according to the energy companies that want to build it. The pipeline would extend about 550 miles in West Virginia, Virginia and North Carolina to bring natural gas for power generation, homes and businesses. Dominion plans to build and operate the natural gas pipeline pending regulatory approval for a four-member joint venture that includes Atlanta-based AGL Resources, Duke Energy, and Piedmont Natural Gas. If approved by federal regulators, construction would start in 2016 with service projected to begin by late 2018.
Keeping up with the national trend, Utah is seeing a rebound in the development and construction of commercial real estate across the state, jumping from 26th to 6th nationally in terms of spending across all categories of commercial real estate in 2011. According to the Standard Examiner, $3.6 billion was spent in Utah last year on the development and construction of office, industrial, and retail buildings, which supported 77,550 jobs.