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This paper examines the use of publicly funded subsidies to encourage hotel development in the United States. It reports highlights from the largest and most complete data base assembled on these transactions. This data shows that public subsidies play a significant role in American hotel development and many projects that are in various stages of the development pipeline include the use of public funds. It goes on to present eight impact analyses that look at how key performance metrics of competing hotels in various markets are affected when they have to contend with new entrants that are subsidized. Three markets saw increases in indexed RevPAR, while in the other five markets competing hotels seemed to suffer after the introduction of publicly subsidized competition.


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