The Difficulties of Building a Business in Detroit

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Dec. 3 (Bloomberg) -- Stephen Joyce, CEO at Choice Hotels International, discusses the difficulties of building a business in the city of Detroit and the expected upswing in the overall hotel industry over the next 3-4 years. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

They will give rise like you in sentence.

What will it take for you to put reasonably priced lodging in a detroit flat on its back?

By definition, downtown detroit is reasonably priced as it is because there are a lot of people that do not go there anymore.

I have done hotels there 15 years ago and as recently as five years ago.

Very difficult to get done because the business is not there.

It has all moved to the suburbs.

A lot of suburbs that are doing well.

Pontiac doing well.

Downtown detroit has been a real problem.

What does it cost to get a franchise going?

More of our hotels are more in the modern tear.

5 million-$8 million total.

A couple of million in equities.

When you go into markets like detroit, you are looking for big incentives from the city to go there.

What incentive do you need from the mayor to put in econo lodge in the city?

Today he would probably have to give us a building and parking.

If his bet pays off, is that the all caps on for someone like you to go in?

You are looking for signs of life.

You want to help the city, but you have to make money for the shareholders in the end.

There have been 15 plants for detroit over the years, and none of them ever work because they all all through.

I was part of the redo of the ford center, and that did not work either.

It has a big -- it has been a big problem building forever.

Michael mckee to the theatrics.

Will we have a decision this morning or does it get delayed?

We will have a decision on whether they can file or not.

The hearing starts at 10:00. he said he will discuss the ruling.

Not clear if the headline will be at 10:00 or will take a while to route -- read the ruling.

If he decides the grounds would be they did not negotiate in good faith with the unions ahead of time, then thousands of lawsuits flood the city.

They have not paid their bill since june.

Anyone who has not paid, will be the first -- wanting to be the first one to recover.

Since june, that is when they first defaulted on the bonds.

Let's talk about the hotel industry broadly.

It has actually benefited in the fact that there have not been that much supply.

That may be changing.

Helton saying it has 1000 new hotels in its pipeline.

-- hilton.

It is coming back.

The good thing for the businesses, those hotels will not be delivered until 2015. there is another few years of a good run.

Still half of the original supply increase the hotel business has traditionally gotten.

Maybe one percent overall.

So it is so very low.

The existing hotel owners will do well.

Stephen joyce with us through the hour.

Just getting started with stephen joyce.

The twitter question of the day, how do you choose a hotel?

Tweet us @bsurveillance.

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This text has been automatically generated. It may not be 100% accurate.

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