Hotel capex to drop for second straight year--NYU

* Capex projected to be $3 billion in 2010

* Spending may not pick up again until 2012

NEW YORK, June 22 (Reuters) - Spending on new carpets, beds and lampshades at U.S. hotels will drop for a second straight year in 2010, as the lodging industry grapples with high debt and a slow recovery of demand.


Capital expenditures at U.S. hotels will fall about 10 percent from 2009 levels to $3 billion, according to a new study from New York University's hospitality school.

The result may be more faded walls, torn drapes and scratched furniture, which could hurt satisfaction scores that hotels tout to lure new business, according to the study's author, NYU professor Bjorn Hanson.

"We're more at the beginning of guests noticing this," Hanson said, in an interview.

Last year was tumultuous for the U.S. lodging industry, with companies such as Marriott International Inc (MAR.N) and Starwood Hotels & Resorts Worldwide Inc (HOT.N) seeing an unprecedented drop in demand.

In 2009, capital spending fell to $3.3 billion, a 40 percent drop from 2008, when the lodging industry spent a record $5.5 billion on improvements such as freshly painted walls, lobby overhauls and other improvements.

Last year marked the first annual drop in capital expenditure for the hotel industry since 2003.

Hanson expects the hotel industry will see an uptick in capital expenditure in 2012, a year after profits are projected to pick up at individual hotels.


The infusion of investment in 2008 is allowing some hotels to skip some projects they might have readily completed a few years back.

But some of those upgrades are now starting to show signs of wear and tear, Hanson said, adding he sees the effect of lessened capital spending during his own travels.

"There was an effort to use some more intense colors (a few years ago)," Hanson told Reuters in an interview. "When the fabric gets a bit worn, those colors seem to show the wear, a little bit of fading or a little loss of finish."

Spending on capital improvements is likely more difficult for new hotels that were built or bought in the past 5 years at higher costs, Hanson said. New properties may have to funnel more of their revenue toward paying down debt.

But one area hotels are likely to keep up with is the lobby.

"Lobbies are less likely to be deferred because so many people make their decision about staying at their hotel and what room rate is appropriate based on the lobby," he added.
(Reporting by Deepa Seetharaman; editing by Andre Grenon)