Introduction
The hospitality business is an important branch of the state economy, and much attention is paid to investing in this area in developed countries. In the USA and, in particular, in Washington, D.C., where a large number of administrative centers are concentrated, this industry is advanced due to many guests coming to the capital. Based on the analysis of the development of the hotel business in this region, it is possible to consider the specifics of investing and the growth prospects of interest in this field.
As related sub-topics, such factors will be assessed as security parameters, tourism opportunities, tax liabilities, and pricing policies. Finding the best ways of financial promoting hotels in Washington is an essential task for the owners of these establishments, and the economic indicators of development directly affect the profits received by the state.
Historical Background
In the district under consideration, many significant events took place. A number of meetings at the highest level were held in local hotels, which acquired the status of cultural heritage and became part of modern history. For instance, the establishment “Mayflower” founded in 1925 is known for its neighborhood with the White House, which is one of the factors that attract honored guests (Morris and Patrick 36). However, some of the local hotels have an even earlier history. As the authors point out, the legendary “Willard InterContinental Hotel” was erected between 1816 and 1858, suggesting that the hospitality business in the region appeared before the Civil War (Morris and Patrick 35). Therefore, the analysis of this industry may provide a large number of valuable facts and historical links.
Geographical and Economic Importance
From the standpoints of both geographic and economic importance, hotels in Washington have the status of sought-after establishments. According to Beracha et al., such an indicator as land supply elasticity in this region is high enough (1.28), which proves the demand for construction here (271). Regarding geographic significance, the status of the capital determines the high density of guests at various levels, including high-ranking persons. Consequently, those hotels that are intended to meet the guests of honor meet the highest standards in this industry. Therefore, investing in the construction of hotels in Washington, D.C. is the promising field of ​​financing.
Crime Rate and Level of Safety and Security
The desire to ensure the safety of guests and complete protection from any dangers from the outside is an essential aspect of all the hotels’ activities. As Singh argues, after the 9/11 terrorist act in New York, significant measures were taken to strengthen control over the protection of hotel complexes, including those in Washington (2). Since many of the establishments are located relatively close to the White House, security is imperative for local services.
Compared to the 20th century, the crime rate is significantly lower due to the increased control of guest protection and round-the-clock surveillance of security. According to Singh, modern controls are used by employees to scan visitors’ baggage and monitor all unauthorized persons in the hotels’ territories (3). In this regard, despite possible threats on the streets of the city, security in hotels is provided at a high level.
Business and Tourism Opportunities
Opportunities for the development of the hotel business in Washington, D.C. are wide and quite open. The analysis of 86 hotels based on certain criteria (the geographical location of the city, guest reviews, the purposes of visits, and other factors) shows that investing in this industry can bring significant dividends (Xing 53). In terms of tourism opportunities, promotion in this area may also be profitable. Many guests come to the capital in order to see various sights, and creating favorable conditions for tourists’ comfortable stay can pay off in a short period. Although Washington’s hotel business is quite dense, building new establishments and investing in old ones may bring significant bonuses to investors.
Prospects for Industrial Growth
The prospects for industrial growth by investing in the hotel industry can be achieved through various factors. Positive perspectives may be due to different criteria, but in the case of successful financial operations, a profitable and stable system can be organized. Lait and Mortimer cite the examples of investors who have staked on the construction of hotels by a national focus in Washington (37).
As a result, German, French, Chinese, and other establishments enjoy significant demand from the target audience and provide their owners with high profits. Moreover, based on the current trends, there are opportunities not to limit a certain business to the construction of a single hotel. Instead, the whole network with an advanced control system may be built. There are many examples of such clusters in the world, and in case of the efficient allocation of resources and competent leadership, significant prospects for industrial growth will be provided.
Taxation Features, Average Prices, and Return of Investment Profits
Regarding the taxation policy, the situation in the hotel business in Washington, D.C. had several periods. According to Kohanzadeh, “the hotel sales tax rate was raised from 13 percent to 14.5 percent in 1999,” and in 2009, this figure was 1.5 percent. From the point of view of the pricing policy, according to the study by Beracha et al., the average price per room in hotels in Washington was $157,754 in 2017 (261). In relation to revenues, the rate of investments profits per room was $102.02, which was a rather high parameter. Based on these figures, it is possible to conclude about the relevance of investments in the local hotel business.
Investment Facilitations
As instruments that encourage investment in the hotel business in Washington, some financial freedoms can be granted to business market participants. As Kohanzadeh notes, in 2015, specific steps in this direction were taken when some funds “were exempted from the unincorporated business franchise tax.” Such steps may allow investors to dispose of available resources more freely and develop a specific industry in the direction that is in demand today. In addition, encouraging entrepreneurship in the hospitality business can involve providing appropriate assistance to those who intend to organize their own projects, and gradual credit payments will be charged as compensation. Accordingly, the participation of public authorities is a prerequisite for investment promotion.
Conclusion
Stimulating investments in the hotel business in Washington, D.C. is a productive practice since both the owners of establishments and the state can benefit from the prospects for economic growth. The considered region is a favorable platform for the development of this sphere due to a good geographical position and the high concentration of administrative centers. Modern safety indicators are a significant aspect of work, and corresponding tourist and business advantages are achieved due to high-quality services. Specific taxation and pricing policies need to be taken into account in order for all the investments to be justified, and the influence of the authorities in regulating this industry is significant.
Works Cited
Beracha, Eli, et al. “Real Estate Market Segmentation: Hotels as Exemplar.” The Journal of Real Estate Finance and Economics, vol. 56, no. 2, 2018, pp. 252-273.
Kohanzadeh, Hannah. “Taxes in the District: The Evolution of DC Tax Rates Since the Early 2000s.” DC Fiscal Policy Institute. 2018. Web.
Lait, Jack, and Lee Mortimer. Washington Confidential. Pickle Partners Publishing, 2018.
Morris, Gregory D. L., and Tara Patrick. “The Business of History.” Financial History, vol. 125, 2018, pp, 35-39.
Singh, Jaswinder. “Safety & Security Concerns in Hospitality Industry.” International Journal of Management and Commerce Innovations, vol. 2, no. 2, 2015, pp. 1-5.
Xiang, Zheng, et al. “A Comparative Analysis of Major Online Review Platforms: Implications for Social Media Analytics in Hospitality and Tourism.” Tourism Management, vol. 58, 2017, pp. 51-65.