The Naples Beach Club, a Four Seasons resort on the Gulf Coast of Florida, opened in November as a lodging industry rarity: a new luxury hotel built directly on a US beach.
It’s also a useful starting point for explaining why spring break vacations have become so expensive.
Americans – especially wealthy ones – are spending more on travel, and hotel developers are struggling to keep up. There are currently no new luxury beachfront hotels under construction in the US, according to data from CoStar Group Inc. The imbalance is driving room rates higher and feeding fierce competition among investors when beachfront properties do hit the market.
“The number one reason why more resorts like this don’t get built is that you can’t find the land,” said Coburn Packard, head of real estate equity at BDT & MSD Partners. “The second reason is that few developers have the patience and expertise to complete such projects.”
BDT & MSD and its partner Athens Group spent years acquiring the pre-existing hotel and obtaining approvals to tear down the old structure and build something new. Beachfront construction adds complexity, requiring building techniques designed to withstand powerful storms. At the Naples Beach Club, developers had to work around a hurricane that washed sand over the site after they had begun to pour concrete.
Packard wouldn’t disclose the total price tag for the new property, but said a good rule of thumb for high-end resorts in the US is well over US$2 million ($3.5m) a room. The Naples Beach Club has more than 200 rooms, a full-service spa and an array of dining options set on 305 metres of white-sand beach.
No supply
There were just 81 luxury hotels under construction across the US as of March, according to CoStar, and the number of new rooms underway is down 40% from March 2019. Some of those hotels are being built near beaches, but not on them.
The absence of new supply is especially stark because well-off leisure travellers have been the strongest source of hotel demand in recent years. Revenue per available room at US luxury hotels grew by more than 5% last year from the year before. The same metric for the broader category of all US hotels declined in 2025.
The development slowdown poses a challenge to lodging companies like Marriott International Inc and Hilton Worldwide Holdings Inc. In some cases, those firms have dangled “key money” to convince resort owners to rebrand their properties. One such example is the Turtle Bay Resort on Hawaii’s Oahu, where Host Hotels & Resorts Inc converted the property into a Ritz-Carlton after buying it from Blackstone Inc in 2024.
The supply shortage can be good news for owners of existing inventory, especially in places like the Florida Keys, where local law severely limits new development. That should help Northwood Investors, which is exploring a sale of the Cheeca Lodge & Spa in Islamorada. The property, once home to a tournament for bonefish anglers hosted by former US President George H.W. Bush, could be valued at US$300m.
“Most of these legacy resorts wouldn’t be able to be built today,” said Jan Freitag, national director of hospitality analytics at CoStar. “It’s good news for existing owners, and I don’t think it’s going to change.”