The Effects of Age on the Performance of Hotels: Does an Historical Effect Exist?

This paper focuses on the relationship between hotel age and performance, challenging the prevailing theory that hotel performance uniformly declines with age. Using the most extensive dataset available, encompassing over 3,000 U.S. hotels over six recent years, we employ a mixed-methods approach to assess whether a U-shaped performance trend exists. Our analysis reveals a nuanced pattern wherein hotel performance declines during the initial years of operation but improves beyond a critical turning point at approximately 40 years old, particularly for hotels located in large metropolitan areas, and also based on hotel brand-affiliation status and class. The findings suggest that certain older hotels defy conventional depreciation models, experiencing a resurgence in performance. These insights have implications for hospitality researchers, as well as for practitioners, suggesting re-evaluating older hotels’ strategies and informing investment and taxation decisions.