Reports

Impact of Countervailing Forces on Hotel Values and Cap Rates

After more than five years of relative stability, new factors are at play in the hotel investment market that will affect hotel capitalization rates and values in a changing economic landscape. Hotel sales transaction activity declined in 2017, while cap rates continued to rise modestly, and hotel values held stable. The outlook for 2018, while uncertain because of the changing political and economic landscape, is more positive than a year ago due to the tax reform's favorable treatment of commercial real estate and a more optimistic business environment. This article presents recent trends and a sensitivity analysis illustrating the potential impact of these forces.

By Suzanne Mellen, Senior Managing Director - Practice Leader, San Francisco, HVS

United States

Vietnam Works On 16 Million Foreign Tourists In 2018 | tourism-review.com

In 2017, Vietnam received 73 million domestic visitors and nearly 13 million foreign tourists, an increase of nearly 30% on year-on-year basis, with a turnover of approximately 510,000 billion dôngs (EUR 18.3 billion). An unprecedented rise.

"Welcoming nearly 13 million foreign tourists in Vietnam in 2017 and a three million year-over-year increase is a new record in Vietnam's tourism sector," said Nguyen Van Tuan, head of the National Tourism Administration.

According to him, 2017 was the first year of implementation of the Political Bureau's resolution No. 08-NQ / TW to make tourism a leading economic sector. 2017 was also an important milestone in achieving the resolution's target of 17 to 20 million foreign tourists by 2020.

tourism-review.com

Vietnam

62 million: No. of international arrivals in Africa in 2017

Africa reached a record 62 million international arrivals in 2017, translating to a growth of 8%. Arrivals in Sub-Saharan Africa increased by 5% while North Africa enjoyed a strong recovery with a 13% growth in arrivals. The continental growth supersedes that of the international number, which stood at 7% in 2017 to reach 1,322 million. This is according to the latest UNWTO World Tourism Barometer, which goes on categorize the tourism sector as a key driver in economic development.

By Josephine Wawira, Consultant, Jumia Travel

Promising Future For Tourism In Europe In 2018 | tourism-review.com

After rather promising numbers in 2017, 2018 appears to be even more fruitful for the continent, according to tourist offices surveyed by Tour Hebdo. The United Kingdom even expects to break all of its records, exceeding for the first time the 40 million international visitors’ limit, to reach 41.7 million visitors, with an increase of 4.4% in contrast to 2017.

Croatia seems to be reaching for its historical record. The minister of tourism says that the country should host 20 million international visitors in 2018, in comparison to nearly 18.5 million last year, including 540 000 French arrivals. The Croatian administration announces the opening of 40 new hotels this year, which further expands the hotel capacity of the country.

tourism-review.com

Market Pulse: Seattle, WA

My, oh, my! The famous catchphrase coined by Seattle Mariners' longtime sportscaster, Dave Niehaus, is ever so fitting as we look at how Seattle has changed over the last ten years. Seattle enjoys a diverse economy rooted in manufacturing, biotechnology, high technology, telecommunications, health care, and tourism. Metro Seattle, especially Downtown Seattle and Bellevue, is experiencing a period of exponential growth anchored by tech giants, such as Amazon, Microsoft, Google, and Expedia. The area is also home to several Fortune 500 companies, such as Boeing, Costco, PACCAR, Weyerhaeuser, Starbucks, and Nordstrom. Moreover, other key employers in the area, such as the University of Washington, Bill & Melinda Gates Foundation, and Fred Hutchinson Cancer Research Center, strongly influence the local and regional economies. Today, Seattle is among the fastest-growing cities in the U.S., and the commercial developments in the area have fueled unprecedented hotel demand growth, spurring new hotel construction throughout the market.

By Kirsten Smiley, Senior Vice President, Southern California Region Director, HVS Los Angeles, HVS

Seattle, Washington, United States

Market Pulse: Fort Worth, TX

Anchoring the west end of the Dallas/Fort Worth Metroplex, Fort Worth features the old and the new. Also known as "Cowtown," the cattle industry initially spurred economic development in the city. Today, glass and steel skyscrapers share the sidewalks of Downtown with renovated historic districts, such as the Fort Worth Stockyards National Historic District and Sundance Square.

By Kathleen Donahue and Hunter Dietz

Fort Worth, Texas, United States

HVS Market Pulse: Center City Philadelphia

Philadelphia lays claim to many firsts in the U.S., including the first state capital, public library, hospital, stock exchange, and even the nation's first zoo. Today, revitalization efforts continue to fuel the city's engine of innovation, building on a base of airport, tourism, education, and convention demand drivers. Strong group demand in recent years, combined with rising levels of transient corporate and leisure travel, has boosted occupancy and average daily rate (ADR), especially within Philadelphia's Center City submarket.

By Kim Lindell and Scott Killheffer

Philadelphia, Pennsylvania, United States

Market Pulse: Anaheim/Garden Grove | By Li Chen

The market is experiencing a period of economic strength and expansion, primarily led by the tourism and leisure industry and the presence of Disneyland and the Anaheim Convention Center, which continue to attract visitors and bolster lodging demand.

By Li Chen, Vice President, HVS

Anaheim, California, United States

Market Pulse: Detroit, MI

The Detroit metropolitan area has experienced significant economic growth in recent years, fueled by a strengthening auto industry as well as the continued diversification of the local employment landscape. The hotel sector is benefitting from existing employers expanding operations locally and new entrants to the market. The Big Three automakers continue to invest in the region, while companies like e-commerce giant Amazon.com Inc. are building large warehouse facilities. Revenue gains for hotels were accordingly robust during the 2010–2016 period. Revenue per available room (RevPAR) during that stretch grew nearly 71 percent, rising from a low of roughly $38 in 2009 at the depths of the Great Recession to over $64 by year-end 2016. Both the average daily rate (ADR) and occupancy have posted consistent gains since 2010. Moreover, hoteliers sold a record number of room nights in the city of Detroit in 2016, according to STR. Occupancy levels approached 70 percent by the end of 2016, with ADRs of nearly $150 in the central business district (CBD). The data for 2017 show a relatively stable occupancy level with robust gains in ADR. The record performance achieved in this expansionary period has spurred tremendous hotel development in the downtown core and suburbs.

By Brandon Leversee, Vice President with HVS Detroit, HVS

Detroit, Michigan, United States

Tourism In Algeria: The Number Of Tourists To Double | tourism-review.com

Minister of tourism in Algeria announced his plan to substantially increase the number of tourists. 4.4 million international tourists are expected in Algeria by 2027, in contrast to 2.4 million today.

The Minister of Tourism and Handicrafts, Hacène Mermouri, has been quoted by the Oxford Business Group (OBG), an international consulting firm, saying that 1,812 new hotel infrastructure projects have been approved by the Ministry. This series of projects is expected to increase the capacity to 240,000 beds, in contrast to the current 100,000, and create 99,000 jobs.

tourism-review.com

Algeria

HVS Market Pulse: Lubbock, Texas

Lubbock (aka "Hub City"), Texas, connects business, educational, and healthcare enterprises spread across the region known as the South Plains. This region encompasses the largest contiguous cotton-growing operations in the U.S., and agriculture, manufacturing, and technology are pillars of the local and regional economies. Economic growth in Lubbock has boomed over the past several years, and through a varied cross-section of industries, the city's Downtown is poised for a major revitalization.

By Hunter Dietz, Project Manager at HVS Dallas, HVS

Lubbock, Texas, United States

Market Pulse: Tampa, FL

Tampa's warm weather and relatively inexpensive cost of living are just a couple of the reasons people and companies are relocating to the Tampa Bay area from far and wide. Continued investment by both the public and private sectors is anticipated to set the stage for continued growth. These factors, among others, are driving hotel demand and room-night production, which is leading to an increase in new hotel developments.

By Mallory Hall, Project Manager at HVS Atlanta, HVS

Tampa, Florida, United States

Macau Tourism To Welcome 40 Million Visitors In 2025 | tourism-review.com

HOME Weekly Travel News MACAU TOURISM TO WELCOME 40 MILLION VISITORS IN 2025 MACAU TOURISM TO WELCOME 40 MILLION VISITORS IN 2025Richard Moor - Dec 4, 2017 0 Asia & Pacific - Macau - Travel & Tourism Industry News Travel, tourism & hospitality industry coverage news Macau may receive up to 40 million visitors in 2025, which represents an increase of almost 30% compared to last year, as announced by the Macau tourism authorities during the presentation of the Tourism Industry Development Master Plan.

Macau, with its mere 30 square kilometers of area, a population estimated at 648.4 thousand residents and as the only place in all of China where gambling is allowed, received 30.9 million visitors in 2016, most of them coming from mainland China.

tourism-review.com

Macau

Portugal: Tourism Sector Expected To Grow Thanks To Luxury Hotels | tourism-review.com

A recent study on the tourism sector in Portugal revealed that the industry is likely to grow in the area of luxury hospitality and several niche products like nature, surf, sun, beach, and culture. The regions with positive outlook with respect to tourism include Algarve, Lisbon, Porto and Madeira.

The study was published by Cushman & Wakefield in response to the increasing interest of real estate investors in the Portuguese tourism sector. The report “Hospitality Market in Portugal 2017” talks about a booming hotel sector in the country, marked by an excellent performance of hotels and by the ever increasing tourist indicators registered year after year, since 2010.

tourism-review.com

Portugal

Tourism’s prominence grows, as African governments position the sector in their agenda

The tourism sector in Africa, which according to UNWTO saw an 8% increase in international arrivals in 2016, is progressively becoming prominent largely due to the increased commitment from governments. Possessing massive potential to foster positive change and transformation, it is timely that most heads of states and governments are seeing the urgency to prioritize the sector now directly accounting for 10.2% of the world's GDP (US$2.3 trillion).

By Josephine Wawira, Consultant, Jumia Travel

The HVS Quarterly Macau Update

The past two years have been a difficult period for Macau since the Chinese President Xi Jingping announced a campaign to crackdown corruption and government official's lavish spending, triggering significant slumps in visitor arrivals and revenue growth in the tourism and gaming sectors in Macau. After two years as of 2017, Macau's resilience has been demonstrated through the growing visitor arrivals, hotel performance, and casino revenue, even after the detrimental Typhoon Hato.

By Christy Tung and Daniel Voellm

Macau

The HVS Quarterly Hong Kong Update

The third quarter of 2017 recorded the highest number of mainland Chinese arrivals since the same period in 2015, which bodes well for Hong Kong tourism. Safety concerns towards other destinations in the region and fewer headline-making news about Hong Kong are the key contributors to the increase in visitor arrivals from mainland China. Thus, the tourism and the retail sectors in Hong Kong enjoyed a steady recovery after a slump in mainland arrivals in 2016.

By Christy Tung and Daniel Voellm

Hong Kong (SAR)

HVS Market Pulse: Galveston, Texas

A weak energy sector has led to negative lodging fundamentals throughout much of the greater Houston region; however, one destination continues to illustrate its resilience. Galveston Island has realized year-over-year growth in total visitation in each of the past seven years following Hurricane Ike. While the rate of growth has slowed in recent years, no doubt somewhat affected by volatility in the energy sector, positive factors such as the recently completed expansion of the cruise terminal and the low gasoline prices have contributed to the growth in visitation numbers. This article will explore tourism trends on Galveston Island. Galveston Island is a 64-square-mile barrier island located 50 miles southeast of Houston. With 32 miles of beaches, a variety of historic neighborhoods, ample leisure attractions, and a multitude of festivals, the tourism industry remains a mainstay of the local economy. The relative affordability of the island, and the proximity to and size of the Houston metropolitan area contribute to the strength of this industry.

By J. Carter Allen, Managing Director, HVS

Galveston, Texas, United States