Faced with a marketplace still struggling to regain its footing, the majority of hospitality executives remain bearish, but bullish sentiment has begun to gain momentum.

According to the DLA Piper 2010 Hospitality Outlook Survey, asset values are expected to stabilize during the next 12 months and the majority of respondents expect the US hospitality industry to rebound in 2011.

This growing sense of cautious optimism has been spurred by hospitality executives’ strong sense of confidence that current market conditions continue to create “good” buying opportunities, which will be led by investment activity from private equity and foreign investors. Looking abroad, the majority of respondents identified Brazil and China as the most attractive foreign markets for US investors.

Notably, one in four respondents reports having a loan that will mature in the next year, but only a small fraction of these respondents think their loan will move into foreclosure

HIGHLIGHTS OF DLA PIPER’S 2010 HOSPITALITY OUTLOOK SURVEY INCLUDE:

  • 68 percent of respondents describe their 12-month outlook for the US hospitality industry as “bearish,” down from 93 percent in 2009.
  • 60 percent of respondents expect the US hospitality industry to rebound in 2011.
  • 42 percent of respondents expect no significant change in hotel asset values, while 20 percent expect values to rise, a sharp contrast to 2009 when 86 percent expected values to decline.
  • 76 percent of respondents think that current market conditions have created good buying opportunities for well-capitalized investors, up from 65 percent in 2009.
  • 1 out of 4 respondents has a loan maturing during the next 12 months, but only 4 percent of these respondents think their loan will move into foreclosure.
  • Respondents identified Brazil (37 percent) and China (29 percent) as the most attractive foreign markets for US investors.
  • The majority of respondents (59 percent) expect that China will be the largest foreign investor in the US hospitality industry.
  • 82 percent of respondents think that investment activity in “green” hotels will continue as a long-term trend, but only 23 percent think green hotels are driving consumer choice.

Sandra Kellman
Global Co-chair and Head of Hospitality & Leisure Group US, DLA Piper
+1 312 368 4082
DLA Piper UK LLP

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