Development Opinion Articles - Hospitality Net

Advertisement

Opinion Article

March 18, 2020

COVID-19 Financing Strategic Options For Hotel Owners

Along with all the other industries around the world the U.S. hotel industry has been blindsided by the COVID-19 Global Pandemic Black Swan Event. Instantly, hotel owners have found themselves with empty hotels, depleted cash reserves, and wondering how they will be able to make their monthly mortgage payments and payroll which were hardly ever considered to be a problem in the expansionary period leading up to COVID-19.

By Harry George Spirides, President, Spirides Hotel Finance Company

Opinion Article

March 10, 2020

Asset Management – Why Bother?

In the course of each year my colleagues and I see a huge number of hotel P&Ls and, within them, there are often wide variances in performance, even in like-for-like situations - whether it is better or worse revenue generation, cost control or effectiveness. Some hotel management companies don't produce an adequate return on their owners' investment by doing as much as they possibly can to increase revenues, reduce operating costs and improve bottom-line profits and cash flow. Only when given a 'kick' from the owner or from a third-party asset manager acting on behalf of the owner does the optimisation of a hotel's performance - and therefore its value - often become a reality.

By Russell Kett, Chairman at HVS - London Office, HVS

Opinion Article

February 26, 2020

Transform Tomorrow – Shaza Hotels

In the lead up to the 2020 Arabian Hotel Investment Conference (AHIC), we asked a number of industry partners how they are transforming their business for tomorrow.

By Noelle Homsy, An Associate Director, leading the hospitality industry, Grant Thornton LLP

Opinion Article

February 14, 2020

A Comprehensive Record of the Lodging Market’s Q4 Transactions

At several points during 2019 many market participants believed the grind higher was going to come to a halt. However, this did not occur, even after a tumultuous 4Q18 where many experts were calling for a downturn. Although America's nancial system has been bueted by a slowing global economy and the U.S. instigated trade war with China, it has been buoyed by the lowest unemployment levels during the past 50 years, and rising incomes which have fueled consumer spending and a generally optimistic sentiment.

By Daniel Lesser, President & CEO, LW Hospitality Advisors LLC (LWHA)

Opinion Article

January 30, 2020

Let us restore our focus on the fundamentals

The Arabian Hotel Investment Conference 2020 is being held at a time when significant changes are sweeping the hospitality landscape of the world - and the region. The state of flux that hotel operators face is driven by several variables and there are no easy solutions to address them.

By Abdullah Al-Abdooli (B.Arch.), Chief Executive Officer - Marjan, MEED

Opinion Article

January 28, 2020

New Hotels and Startups Have Many Things in Common, But Losing Money Shouldn’t Be One of Them

The stories were everywhere: WeWork, the unicorn darling of the co-working space, valued at $47 billion, was a bleeder. And not just a small puncture, but a gaping gut wound from which some $219,000 came spewing out on an hourly basis, reports said.

By David Eisen, Content Director, Media, Questex

Opinion Article

January 27, 2020

Revealed: what’s fuelling the rapid hotel growth in West Africa

Today, Africa is seen as one of the most promising regions for hotel developers. Aside from small chains and independents, four global hotel groups dominate signings and openings on the continent. Over the last four rolling quarters, as of September 2019, Accor, Hilton, Marriott International and Radisson Hotel Group have opened 2,800 rooms and signed deals for 6,600 rooms. Across Africa, hotel development remains important in most advanced economies, such as Morocco and South Africa; and projects are multiplying in East Africa, especially in Ethiopia, Kenya, Tanzania and Uganda. In West Africa, Nigeria is back on the development scene thanks to emerging regional destinations beyond Abuja and Lagos. Francophone Africa is also moving fast. The Ministry of Tourism of Ivory Coast has launched an ambitious national plan for tourism development, Sublime Cote d'Ivoire, and already announced over US$1bn investment in the sector. Senegal is the other regional star, with local programmes such as Diamnadio, Lac Rose near Dakar and Pointe Sarene. Other countries showing active hotel development include Benin, Cameroon, Guinea, Niger, and Togo.

By Philippe Doizelet, Partner Horwath HTL (France), Horwath

Visit HITEC 2026 in San Antonio!

HITEC is the center for the latest conversations on hospitality technology. Come and see the technology shaping the industry.

Hospitality Financial and Technology Professionals (HFTP)

The next-gen metrics that move hotel P&L

Hotel tech has changed what's possible – and measurable. RevPAR and ADR aren't enough; discover the metrics that really matter.

Opinion Article

January 25, 2020

HVS 2020 Hotel Transaction Outlook

As expected, hotel transaction volume fell to a historic low during the peak of the Great Recession in late 2009, a drop that began roughly 24 months earlier at the end of 2007. Similar to the rebound in performance, transaction activity among economy hotels recovered rapidly, but soon declined as investors shifted their focus to midscale and upscale hotels, which recovered more slowly from the recession.

By Benjamin Levin, Chief Investment Officer, Cliffrose Group

Opinion Article

December 3, 2019

LVMH / Tiffany - Diamonds Are Forever!

LVMH is to acquire Tiffany & Co. for $135 per share, in a transaction which will value the entire equity at $16.2 billion. Including net financial liabilities of $0.7 billion, this leads to an implied enterprise value of $16.9 billion for Tiffany, making this the largest acquisition ever made by LVMH.

By Stéphane Haddad, Academic Director Graduate School & Senior Lecturer, EHL

Opinion Article

November 25, 2019

Equity Yield Rates on the Decline

HVS continually tracks the rates of return on the assets on which we consult. In our most recent review, we found that equity yield rates, on average, have shown a continued trend of decline in the full-service and luxury hotels sector, as well as the lower-tier limited-service sector, with the select-service and upscale limited-service sector showing stability.Equity yield rates were notably lower for full-service and luxury hotels, averaging 16.4% for the year-to-date 2019 period, which is 140 basis points (bps) below the 17.8% most recent peak level recorded in 2017.

By Rodney Clough and Katy Black

Opinion Article

November 22, 2019

The Current Impact of Brand PIP Requirements on Hotel Sales

The most consistent issue HVS Brokerage & Advisory has encountered during transactions is whether a group is budgeting sufficient capital for prospective asset acquisitions that require PIP renovations. An incorrect estimate means buyer groups must increase their capitalizations or request a price reduction on a dollar-for-dollar basis relative to their cost increases. This ultimately changes many metrics late in acquisition processes and lowers IRRs because any extra capital is drawn entirely from equity and not a blend of equity and debt. Recent observations are detailed below. The lesson is that accurate PIP estimating is vital in successfully acquiring hotels today.

By Eric Guerrero, Senior Managing Director and a Partner, HVS

Opinion Article

November 19, 2019

Promoting student success in the STR Student Market Study Competition

I was in New York City (NYC) over the Veterans Day weekend for the HX: The Hotel Experience 2019, one of the most important trade shows in the lodging industry. Similar to last year's trade show, the HX 2019 also entailed four components, including HX: The Marketplace, HX: The Conference, Boutique Design New York, and the STR (Smith Travel Research) Student Market Study Competition.

By Linchi Kwok, Professor, CAL Poly Pomona

Opinion Article

October 28, 2019

Q3 2019 US Lodging Market Update

While the U.S. continues to be in the midst of its longest uninterrupted economic expansion in modern history, slowing growth metrics along with abundant geopolitical uncertainties are heightening perceived risk of impending recession.

By Daniel Lesser, President & CEO, LW Hospitality Advisors LLC (LWHA)

Opinion Article

October 14, 2019

Are investment decisions really independent? The role of decision making biases in hotel development projects

Think back to an important decision you have had to make. You may have weighed out the costs and benefits, studied the context, and evaluated the potential outcomes. While one hopes that careful analysis will lead to rational choices, the truth is that our human minds are complex. Our rational decisions are doctored by - amongst many others - feelings of potential regret, conscious or subconscious references, emotional attachment, and herd mentality. These biases prevail in business as much as they do in our personal lives, and we are all prone to them. We take a first look into the role of herd mentality in hotel investment decisions.

By Achim Schmitt and Samrah AlShawi

The next-gen metrics that move hotel P&L

Hotel tech has changed what's possible – and measurable. RevPAR and ADR aren't enough; discover the metrics that really matter.

Opinion Article

September 25, 2019

Formulating “Asset Light” Strategies In The Hospitality Industry Through The Spin-Off Of Real Estate Assets

The objective of this article is to analyze the strategic approach that lodging corporations with owned properties in their portfolio are conducting, which advocates for a bifurcation between operational and asset management orchestration. Such approach is originated inside big hotel chains and is opposite to another industry widespread practice in which a third-party owns several hotel properties and rents those to hotel chains (i.e. Blackstone, Starwood Capital Group, Bain Capital, etc.).

By Francisco Garcia Auyanet, A Proactive, Curious and Constantly Adapting Consultant, Francisco Garcia Auyanet

Opinion Article

September 12, 2019

Hotel Real Estate: How Brands are Re-Imagining Hotel Lobbies

Several reports show the astonishing growth in self workers, contract freelancers and consultants, according to Statista, 10.3% of the working age population is involved in entrepreneurial activities. Alongside this, project task forces are becoming more and more common, and companies are starting to become more agile in their operations, ING's agile transformation started with the 3,500 staff members at group headquarters, Bart Schlatmann: former chief operating officer of ING Netherlands said, "we invested in tearing down walls in buildings to create more open spaces and to allow more informal interaction between employees. We have a very small number of formal meetings; most are informal. The whole atmosphere of the organization is much more that of a tech campus than an old-style traditional bank where people were locked away behind closed doors."

By Remy Rein, Sebastian Smith, and Jason Marin

Opinion Article

August 28, 2019

10 Powerful Ways to Use Instagram for Real Estate Marketing

Real estate and Instagram are a match made in marketing heaven. Pretty much everything about the social network is well suited for real estate marketing: its photo- and video-based content formats make it easy to showcase properties; its mobile-first nature easily incorporates location data and geo-targeting; its huge user base—now numbering more than 1 billion monthly active users—enables reach across many demographics and geographies; and its integration into parent company Facebook’s advertising platform provides sophisticated campaign targeting options.

By Anthony Del Gigante, Chief Creative Officer, MDG Advertising

Opinion Article

August 27, 2019

Food and Beverage Boosts Hotel Revenue

According to an AMPM Hotel supply statistics (October 2018), approximately 150,000 new hotel rooms are expected to enter London by 2020. Research by Knight Frank indicates that investment in the UK hotel industry reached £7.4 billion, demonstrating a 29% year-on-year rise and a £1.7 billion increase in 2018 alone. This extraordinary growth was due to a 50% increase in international investment, with overseas buyers accounting for £4.9 billion invested into the UK hotel market with Asian investors such as mainland China, Singapore and Hong Kong being principally responsible.

By Korosh Farazad, Founder & Chairman of Farazad Group of Companies and Member of Board for Trinity Hospitality Group, Farazad Group Ltd.

Opinion Article

August 7, 2019

Q2 2019 U.S. Lodging Market Update

With 121 consecutive months of growth through Q2 2019, the U.S. economy is now in record territory for the longest expansion period in history. The decade long economic expansion has been fueled in part by job growth, record low unemployment rates, and low-interest rates in the capital markets. During the first half of 2019, America has continued to add jobs, albeit at a slower pace compared to last year. U.S. consumer confidence remains vigorous and stock market indices continue to set record high levels. To mitigate the risks of slower global growth and trade-policy uncertainty, during the near term, the Federal Reserve is widely expected to reduce interest rates. While current economic indicators are a healthy backdrop for the lodging industry, the duration of this expansion has rendered many economic pundits now fearful of the U.S. entering a recessionary environment during the near term. With this said, most anticipate that when a recession does occur, it will be less severe than the Great Recession of 2009-2009.

By Daniel Lesser, President & CEO, LW Hospitality Advisors LLC (LWHA)

Opinion Article

July 11, 2019

Digital Marketing Timeline For New Hotel Opening

A new hotel opening or changing of flags has so many moving parts. As an owner or manager overseeing this transition, you are likely wearing multiple hats. Here is a hotel digital marketing timeline for opening hotels to ensure you are building your website presence and a healthy channel mix that has reduced OTA dependency later down the road.

By Stephanie Sparks Smith, CEO & Digital Matriarch, Cogwheel Marketing, Cogwheel Marketing & Analytics