Based on survey results, the panel is bullish (median 67.5%) on the prospect of the 2020 transaction market beating 2019's tally of $62 billion. Interestingly, nearly 1/3 of the panel is 100% confident of this! On the other hand, the panel's outlook on U.S. RevPar for 2020 (median at 50%) is gloomier with nearly 2/3 of the panel believing it less than 50% likely to exceed STR's forecast of 0.5% growth. 

Questions to panel experts: Why are you so bullish on hotel transactions but more conservative on RevPAR? If hotel operating performance stagnates, why will there be such continued interest in acquiring hotel properties? Should growth in hotel performance (i.e., RevPAR) not be a significant force driving hotel transactions and values? For the naysayers on transaction growth, why is this the case?

Scott  Woroch
Scott Woroch
Partner and Managing Director, Kadenwood Partners

There are a significant number of headwinds facing the global economy -- the latest being the Coronavirus/possibility of a global pandemic, and reduced travel levels; and "shaming" from air travel and its environmental impact, to name a few -- that I think will all exert downward pressure on RevPar. In the US there is the spectre of uncertainty over the US election. In Britain, the government must now face the reality of Brexit, and a real possibility of stagnating or reversing economic growth. And yet, hotels as an asset class have continued to gain traction, and become more mainstream for global investors.

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