As we all continue to find our footing in today’s market, we remain encouraged by the level of interest we have seen from offshore capital looking to invest in U.S. hotel assets, with the driving factors being their search for yield, stability, and growth.
Major cities in the Southeast like Charleston, Atlanta, Savannah, and Raleigh-Durham remain strong hotel investment markets due to their thriving tourism, growing business hubs, and strategic locations. Enhanced financing options are expected to boost transaction volumes. Significant construction pipelines and improving economic conditions highlight the region's long-term resilience and investment appeal.
The Fed recently gave us a surprise similar to the one my grandfather used to give my father. My father recently recounted to my son how his grandfather would give him a quarter and a Dr. Pepper each time he saw him. Occasionally, he would surprise him with a half dollar instead, and my father would be thrilled.
In just one year, CBRE's Global Hotel Asset Management practice has grown to oversee 40+ properties with 8,500+ rooms worldwide. Our success stems from leveraging CBRE's vast resources and our team's global expertise to deliver unmatched results.
Each year, HVS researches and compiles development costs from our database of actual hotel construction budgets. This source provides the basis for our illustrated total development costs per room and per product type.
Fort Lauderdale, a staple South Florida beach destination, is shifting its focus beyond leisure tourism with a $1.3-billion investment in the Broward County Convention Center and adjoining Omni Hotel. Following this project, Fort Lauderdale will position itself as both a vacation destination and a commercial city.
Over the past couple of months, it has become increasingly clear that interest rates for hotel financing, and just about everything else, may stay higher for longer. As markets adjust to this expectation, many investors are realizing that they may not be able to delay deals until rates drop back down to so-called “normal” levels. There is mounting pressure for financing decisions that will need to be made in the coming months. In this article, we have compiled and analyzed historical hotel interest rate data, as well as indications from the Federal Open Markets Committee (FOMC or “Fed”) on the anticipated direction of future interest rates, to help provide some context for the past, present, and future of the hotel financing market.
HVS was a proud sponsor of this year’s ALIS conference, where the sentiment was upbeat and optimistic for the year ahead. This article provides our key takeaways from the conference.
Based on a sample of more than 3,000 hotels from CBRE’s Trends® in the Hotel Industry database, U.S. hotel property tax expenditures averaged $2,626 per available room (PAR) in 2022. This is 10.8% less than the $2,943 PAR recorded in 2019, before the COVID-19 pandemic. Concurrently, the earnings before interest, taxes, depreciation, and amortization (EBITDA) for these same properties fell by 1.7%.
Since room sales generate lodging tax revenues, an overview of hotel market trends provides a perspective on the industry's current and future fiscal impacts. While the negative impacts of the COVID-19 pandemic were unprecedented, as documented in our 2022 HVS Lodging Tax Study, nearly all lodging markets have reached or exceeded pre-COVID levels of revenue generation. Revenue per available room (“RevPAR”), the product of average daily room rate and occupancy rate, is a standard industry metric that combines the effects of occupancy and average daily room rate changes on hotel revenue performance. The figure below compares the amounts of RevPAR in the 25 US urban markets for each month from January 2019 through July 2023.
The COVID-19 pandemic has had a profound effect on the global economy, leading to widespread inflationary pressures. Governments around the world responded with unprecedented levels of fiscal and monetary support to stimulate their economies, the impact of which was felt months later as economies reopened and consumers once again began spending. This trend, along with supply chain issues, led to a noticeable increase in the cost of goods and services.In response to the inflationary pressures resulting from these factors, the United States Federal Reserve System (known as the Fed) has embarked on an interest rate-hike cycle in an effort to taper inflation. However, the rate increases have been the fastest in recent history, since the federal funds rate (FFR) reached a peak in 1980, as illustrated below by the sharper slope of the recent hike cycle.
Automation in the hospitality industry continues to evolve and represents innovation at its finest. Automated processes promote hoteliers to build financial and operational success within hotels that are necessary to remain competitive in the market. Hoteliers can bring their focus back to guests by reducing tasks from their ever-growing to-do list by opting to use automated solutions.
Over the past few decades, we have seen constant advancements in automation technology, particularly when it comes to the hospitality procurement process. Procedures like sourcing, tendering, auctioning, and ordering products have all been adopted into automated systems. And while these advancements have created unmatched levels of consistency, efficiency, and convenience, there’s one area in particular that often gets left out of this automation: payments.
A recent Gartner report claims that by 2025, quite 50% of organizations around the world will have a cloud-based procure-to-pay suite. Tools like BirchStreet Pay are gaining traction as hotels learn more about the advantages and cost opportunities of using saving procurement solutions.
At this year’s Americas Lodging Investment Summit, the opening question in almost every conversation I participated in was “what are you seeing?”
It's no secret that e-commerce has experienced a rapid surge over recent years, reaching a nearly 50% user penetration rate for digital commerce in 2020, and more skyrocketing growth throughout and following the COVID-19 pandemic.
Another ALIS is in the books, and a busy one at that, with nearly 3,000 in attendance. If you weren’t one of those lucky thousands, here are our takeaways.
In an article we published in February 2021, before the COVID-19 vaccines were broadly rolled out, we suggested to owners of hotels in Florida, and waterfront hotels in the Sunshine State in particular, that their assets would soon be in high demand.
CBRE Hotels Research specializes in translating national and local economic conditions into measures of hospitality market and property-level financial performance now and into the future.
Annual changes in U.S. hotel utility costs and in the Consumer Price Index (CPI), or inflation, have historically proven to be strongly correlated. As of August 2022, CBRE is forecasting CPI growth to be 7.7 percent in 2022, followed by another 3.6 percent in 2023. Since inflation has averaged just 2.2 percent since 2000, these inflation projections have hoteliers concerned about operating costs. Given that rising energy costs are a significant driver of the current rise in CPI, hotel managers are especially worried about utility department expenses.