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?

Robert  Herr
Robert Herr
General Manager at The Bürgenstock Selection

Transaction volume lags RevPAR growth for one, so in the early stages of stagnating or declining RevPAR growth, transaction may very well rise and flatten off at a later stage. Second, after 2018 interest rate increases by the Fed, interest rates have been lowered again in 2019 driving liquidity for asset purchases.

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