Slowing U.S. Hotel Growth Could be Worst in 10 Years
Growth in the booming U.S. hotel industry is cooling off, data tracker STR forecasts, setting the stage for the lodging industry's worst stretch since 2009.
Reports
2019 United States Hotel Industry Outlook
We live in interesting times. Each day, we cannot be sure which way the stock market will swing, with its volatile nature and seemingly knee-jerk reactions to the trade and policy headline of the day. If the stock market serves as a leading indicator of times to come, the economy in 2019 is likely to slow in comparison to the one to which we've become accustomed. Despite this trajectory, other factors still signal that the hotel industry isn't likely falling off a cliff anytime soon.
By Rodney Clough, President - HVS Americas, Denver, HVS
Market Snapshot: Asia Pacific 2018
Transaction activity has been observed to be on a downward trend from 2013 until 2017, owing to the transactions of Dalian Wanda China portfolio to R&F Properties. Since then, the frequency of transactions have been high, with 228 recorded transactions from 4Q2017 to 3Q2018, slightly lower than the 251 recorded the previous four quarters.
By Hok Yean Chee, Regional President of HVS Asia Pacific, HVS
U.S. Lodging Performance Fell Short Of Budget In 2017
In 2017, the actual achieved levels of occupancy, average daily rate (ADR), total revenue and profits for U.S. hotels were less than their respective budgeted amounts. After a five-year period (2011 through 2015) of extremely accurate budget projections, this marks the second consecutive year that owners and operators failed to meet their operating goals.
By Robert Mandelbaum, Director of Research Information Services, CBRE Hotels
Hotel Industry – Q4 2018 and Beyond
Many of us who attended The Lodging Conference this past month heard Bernard Baumohl, Chief Economist for the Conference Board, provide his economic forecast. He covered topics in his usual fast, effective and entertaining style. Some interesting takeaways were that business spending is not up much, oil is going to see oversupply and is up markedly due to politics (not the market), and GDP will be up 3 percent this year, 2.2 percent next year and 1.4 percent in 2020, according to the Consensus Forecast.
By Bob Rauch, President of RAR Hospitality, R.A. Rauch & Associates, Inc.
North American Hoteliers Kick Off Second Half of 2018 with Continued Steady Rates and Bookings; Q2 2019 Shows Signs of Softness
TravelClick, a leading global provider of data and revenue-generating solutions for hoteliers, today released new data from the Company's August 2018 North American Hospitality Review (NAHR). According to this data, the second half of the year has stable rates and bookings across all travel segments, up 1.80 percent in average daily rates (ADR) and 0.51 percent in bookings in the third quarter when compared to the prior year. Group travel in Q3 is also up 1.81 percent in ADR and 0.50 percent in bookings, and the transient segment overall is up 1.80 percent in ADR and 0.52 percent in bookings in the same time period.
Ten Years Later: Has The U.S. Lodging Industry Really Recovered?
Lodging is a cyclical industry meaning that it passes over time through four distinct phases: peak, contraction, trough and expansion. Most industry participants believe that 2007 was the previous peak of the current business cycle following six years of expansion from the 2001 industry recession. According to STR, the demand for lodging increased for six consecutive years from 2002 through 2007, while average daily room rates (ADR) grew in excess of 4.5 percent during the latter four years. Per CBRE Hotels' Trends® in the Hotel Industry survey, gross operating profits (GOP) were growing at a 10 percent annual pace leading up to 2007.
By Robert Mandelbaum and Keval Rama
To Q3 and Beyond: Hotel Industry Forecast for San Diego, Arizona, Colorado, and Other U.S. Markets
U.S. Economy
By Bob Rauch, President of RAR Hospitality, R.A. Rauch & Associates, Inc.
HVS Market Pulse: Greater Phoenix, AZ
Following several years of strong RevPAR growth leading up to Super Bowl XLIX in 2015, growth in the Phoenix market has slowed somewhat. ADR growth was modest in 2016, as much of the market experienced a post-Super Bowl correction, but ADR rebounded in 2017. Occupancy growth has remained relatively modest since 2016, slowing even more in 2017 but remaining positive. Year-to-date data through May 2018 illustrate modest increases in both occupancy and ADR, resulting in moderate RevPAR gains.
By Michael Smithson, Senior Project Manager at HVS Phoenix, HVS
HVS Market Pulse: Bangkok, Thailand
Bangkok, located in the central region of Thailand, is the county's political and commercial centre and has been the official capital city since 1782. Bangkok is also the main gateway city to Thailand and serves as an aviation hub for the region. The city attracts international and regional markets through a combination of cultural charm and modern shopping centres, appealing to a wide range of travellers. The following article gives a brief overview of Bangkok, its different sub-markets, its tourism industry, and the recent dynamics of the local lodging market.
HVS Market Pulse: Tucson, AZ
The Tucson lodging market often lives in the shadow of its bigger sibling, Phoenix. And while meeting and group demand in both markets is driven by Arizona's idyllic weather during the winter and spring, differences in local dynamics paint significantly different pictures in terms of leisure and commercial demand.
By Michael Smithson, Senior Project Manager at HVS Phoenix, HVS
Cost Controls Perpetuate U.S. Hotel Profit Growth In 2017
U.S. hoteliers enjoyed an eighth consecutive year of increasing profits in 2017 despite another slowdown in the rate of revenue growth. According to the 2018 edition of Trends® in the Hotel Industry, total operating revenue increased by 2.0 percent in 2017 for the average hotel in its survey sample. Fortunately, by limiting the growth in operating expenses to 1.9 percent, managers at the Trends® properties realized a 2.2 percent increase in gross operating profits (GOP) for the year.
By Robert Mandelbaum, Director of Research Information Services, CBRE Hotels
Cape Town Calling: Undoing the impact of ‘Day Zero’ on Tourism
At the end of 2017, one of the most picturesque cities in the world, Cape Town, announced a 'Day Zero' to create awareness among its citizens of the severity of its ongoing water crisis. The day marked to be as early as March 2018 at one point of time has been pushed out to 2020 (or potentially 'never') in light of the city's commendable efforts in changing their lifestyle and focusing on water conservation in all aspects of their day-to-day living. It was heartening to see industries, buildings, farmers, hoteliers, each and every citizen coming together for a common cause and making an effort to reduce water consumption. Just for perspective, Cape Town has reduced its water consumption by 60% down to daily consumption levels of as low as ~500-550 million litres a day, a reduction from the 1.2 billion litres per day mark, just three years ago.The hotel and tourism industry has been at the forefront of a lot of these initiatives. While most of the consumption in the city is residential, hotels seemed to be the ones that took the limelight on water consumption. The hotel industry reacted by closing swimming pools, installing borewells, fitting taps with aerators, using sea water for air-conditioning, implemented the use of paper towels instead of hand towels to reduce the laundry load, installing wastewater treatment plants, removing bath plugs, encouraging guests to take two-minute showers, creating awareness and sharing best practices to switch to a greener lifestyle and more. With the efforts of the city, and some blessed rain showers, the dam levels in Cape Town are back up to 48% as of 2 July (as compared to 25% this time in 2017) and rising with a healthy rainfall predicted through the rest of the winter months. While the citizens are cautiously optimistic, this experience over the last year has left citizens environmentally conscious and waterwise.In January 2018, when I traveled to another country, I would have a longer shower, as a relief to my 60 second shower routine, however 6 months later, having realised the impact of conservation and adjusting to a more waterwise routine, I felt no need to have a long shower upon travels abroad. I feel Cape Town can not only claim its fame for being resilient against the drought and becoming a water wise city but it's citizens/visitors can now be ambassadors of sustainable tourism when they travel. Cape Town is one among a host of cities around the world that may face a water crisis and we may have learnt our lesson earlier than others.In gaining this wisdom however, the city of Cape town's hotels and overall tourism has suffered a blow in terms of declining occupancy and visitation considering the publicity that 'day zero' gained across the world. The city along with the globe now needs to market its comeback and the fact that the destination is a water wise sustainable tourism destination, along with the numerous other tourism accolades that stand to its name. Tourists use a fraction of the water and with so many places to see in and around Cape Town, exploring the mountains, beaches and vineyards, who has time for a long shower anyway. We look forward to welcoming the water wise global travelers to the wonders of Cape Town and Western Cape; and getting back on track for the unprecedented tourist arrivals that the city deserves.
By Rishabh Thapar, Director with HVS's MEA team, HVS
HVS In Focus: Malaysia - Reinvigorated Opportunities
The Federation of Malaysia, located in Southeast Asia, comprises 13 states and three federal territories covering a total area of 329,847 square kilometres across Peninsula Malaysia and East Malaysia. Malaysia's population is approximately 31.4 million (2017 government estimate) with 62% being of Malay heritage. The country's diversity is reflected in the share of different ethnic groups, such as Chinese, Indians and Indigenous, in its total population.According to the World Travel & Tourism Council (WTTC), the direct and total contribution of Travel & Tourism to Malaysia's Gross Domestic Product (GDP) was 4.9% and 13.4%, respectively of the total GDP in 2017, making tourism one of the key supporting industries by the economy.In May 2018, Pakatan Harapan (PH) took over the office from the United Malays National Organisation (UMNO) party and its Barison Nasional (BN) coalition government who has been in office since independence in 1957.The change in government has ushered in a new era filled with optimism but uncertainty about the direction that the country is headed for. As of June 2018, GST has been abolished and several major infrastructural projects are under review as PH demonstrated a stern stance towards fiscal commitment.
By Hok CHEE and Jeremy Teo
INDUSTRY REPORT - 2018 Hotel Industry Innovation Report
Ecole hôtelière de Lausanne (EHL) recently released a comprehensive Hospitality Innovation Industry Report, authored by Dr. Carlos Martin-Rios, an Associate Professor at EHL.
By Carlos Martin-Rios, Associate Professor of Management, EHL
The Annual HVS Asia-Pacific Hotel Operator Guide 2018 – Excerpt
HVS Asia Pacific proudly presents to you the Fifth Edition of the annual Asia Pacific Hotel Operator Guide. Talking to stakeholders in the industry, this publication has become increasingly sought after by the market to evaluate potential candidates to operate a hotel property anywhere in Asia-Pacific. Distribution power, market experience, brand portfolio and geographic presence are all relevant factors in narrowing down the best match. In this fifth edition, HVS has captured over one million existing and more than half a million pipeline rooms spread over 8,395 properties.
By Pawinee Chaisiriroj and Daniel Voellm
The Annual HVS Asia-Pacific Hotel Operator Guide 2018 – Excerpt
The publication continues to serve owners as a reference for which operator has a strong presence in their home market and in potential future markets further ashore as well as key feeder markets across the region.
By Pawinee Chaisiriroj and Daniel Voellm
HVS: Israel Hotel Market Overview 2018
With more than 3.6 million visitors, representing a year-on-year increase of almost 25%, 2017 was the first time in Israel's history that the 3 million mark was reached. This article explores the hotel performance and development pipeline in Israel.
By Lionel Schauder and Russell Kett
Croatia hotel investment on track to reach €1.2B by 2022 - total-croatia-news.com
Investment in Croatia's hotel industry is predicted to reach €1.2 billion by 2022, according to reportfrom Ernst & Young.
Investable hotel market in Germany grows to over EUR 52 billion
The investable hotel market in Germany grew in 2017 by approximately six per cent to EUR 52.6 billion compared to 2016. According to the latest market value analysis carried out by Union Investment and bulwiengesa, the size of the German hotel market has doubled in the last ten years. The key factor in this rise is the continued growth of the branded hotel segment in Germany - which is favoured by investors - as well as a general increase in supply.