Markets & Performance USA & Canada Opinion Articles - Hospitality Net

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Opinion Article

May 27, 2021

COVID-19’s Impact On The Anaheim-Santa Ana Lodging Market – May 2021 Update

Given the impact of the COVID-19 pandemic, the Anaheim-Santa Ana lodging market faced a downturn greater than the past two lodging-market declines combined. During the Great Recession, the Anaheim-Santa Ana[1] market’s occupancy fell roughly five points from 69% in 2008 to 64% in 2009. In 2020, occupancy dropped from the 2019 benchmark of roughly 78% to 43%, reflecting a 35-point correction. Average daily rate (ADR) declined from $123 in 2008 to $109 in 2009, an 11% drop. In 2020, ADR decreased approximately 19% from the rate achieved in 2019 ($166 to $134). Despite the downturn in 2020 and early 2021, the outlook for the market is positive as the area benefits from the presence of several major demand generators, including Disneyland Resort and Knott’s Berry Farm amusement park.

By Brittany Hart, Project Manager with the HVS Colorado office, HVS

Anaheim-Santa Ana, California, United States

Opinion Article

May 26, 2021

Amadeus Data Alert: Hotel Occupancy Insight for the U.S. Memorial Day Holiday Points to Strong Start for Summer Travel

As the school year winds down in many states, Memorial Day starts the summer vacation season in the United States.

By Katie Moro, Vice President, Data Partnerships, Hospitality, Amadeus Hospitality

Opinion Article

May 14, 2021

COVID-19’s Impact On The Hampton Roads Lodging Market

The Hampton Roads economy has long been supported by the federal government, the military, the aerospace industry, and the transportation and healthcare sectors. Lodging demand is also generated by tourism to the beaches and SMERFE-related transient and group travel. The market dynamics have evolved over the last decade with continued urbanization and growth in the Norfolk and Virginia Beach markets, where hotels consistently outperform those in other towns or submarkets within the MSA.

By Chelsey Leffet, Managing Director, Northeast Leader, HVS

Virginia, United States

Opinion Article

May 13, 2021

HVS Market Pulse: Fort Lauderdale

Fort Lauderdale, often regarded as the "Venice of America," is the seat of Broward County and the center of economic activity in the area. The Intracoastal Waterway is lined with waterfront restaurants, scenic walkways, and marinas.

By Emeldina Paratusic, Project Manager, Miami, HVS

Fort Lauderdale, Hawaii, United States

Opinion Article

May 1, 2021

The Growth In Management Fee Expense

In 2019, 86% of the hotels that participated in CBRE Hotels Research's annual Trends® in the Hotel Industry survey of property-level operating statements reported the payment of a management fee. On average, these hotels paid management fees equal to 3.6% of total operating revenue. The management fee to revenue ratio was the highest for convention hotels (4.1%) and lowest for resorts and full-service hotels (3.5%). Relative to the bottom line, total management fees averaged 13.9% of profits. For this analysis, profits are defined as earnings before interest, taxes, depreciation, and amortization (EBITDA).

By Robert Mandelbaum, Director of Research Information Services, CBRE Hotels

Opinion Article

April 27, 2021

COVID-19’s Impact on the Los Angeles Hotel Market

The Los Angeles hotel market, along with the rest of the world, experienced an unprecedented drop in demand in 2020 following the start of the COVID-19 pandemic. Hotel occupancy declined to 49% in 2020, compared to 80% in 2019, while average daily rate (ADR) decreased to $139 in 2020 from $181 the previous year. Overall, revenue per available room (RevPAR) decreased 52.6%, the largest decline in the history of the market. Based on the latest dynamics of supply and demand, below we present our latest forecasts for the recovery of L.A.-area hotels in 2021 and beyond. As with the rest of the industry, while occupancy is anticipated to recovery more quickly, ADR losses often take many years to recover. Our forecast assumes a recovery to 2019 levels after 2025, as illustrated in the following table.

By Luigi Major, Managing Director, Advisory of HVS Americas, HVS

Los Angeles, California, United States

Opinion Article

April 13, 2021

COVID-19’s Impact On The Albuquerque Lodging Market

Amid a worldwide pandemic, the lodging industry is facing a downturn that is greater than the past two lodging-market declines combined. According to Visit Albuquerque, Albuquerque's RevPAR fell roughly 47% in 2020 from 2019 levels, driven primarily by occupancy losses of up to 33% compared to 2019 and ADR declines of up to 21%. The occupancy loss was not only a factor of limited demand caused by the travel halt at the onset of the pandemic, but also of New Mexico being closed to travelers from outside the state for most of the year. As many other markets in the United States were supported mid-summer by leisure guests, a required 14-day quarantine for visitors to New Mexico resulted in significant cancellations starting in July, handicapping demand through the remainder of the year.

By McKenna Luke, MAI, Managing Director, at HVS Albuquerque, HVS

Albuquerque, New Mexico, United States

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Opinion Article

April 9, 2021

COVID-19’s Impact On The San Antonio Lodging Market

Prior to the COVID-19 pandemic, Downtown San Antonio was enjoying a decade of revitalization and growth. The year 2020 was poised to be a banner year, spurred by the Henry B. Gonzalez Convention Center's $325-million renovation and expansion, which was completed in January 2016. Data provided by the Texas Comptroller of Public Accounts indicate that hotel revenue across the San Antonio-New Braunfels MSA declined by roughly 53% in 2020. RevPAR for the MSA remained relatively stable in 2018 and 2019, before plummeting approximately $40 in 2020 to a historical low of $37. New hotel supply increased by almost 2% in 2020, compared to a nearly 4% increase in 2019. Despite COVID-19's significant impact on the lodging industry, various development projects in and around San Antonio are expected to fuel a strong recovery.

By David Bone and Shannon Sampson

San Antonio, Texas, United States

Opinion Article

March 31, 2021

COVID-19’s Impact On The San Francisco Lodging Market

Prior to the onset of COVID, San Francisco was amid a tech-driven renaissance that placed the city and the nine-county San Francisco Bay Area as one of the top-growing metro areas over the last decade.

By John Berean, Managing Director, HVS

San Francisco, California, United States

Opinion Article

March 30, 2021

Spring Has Arrived In New England, Bringing With It Hope For Its Lodging Markets

After a long and grueling 12 months, spring has finally arrived in New England and with it, renewed hope for its lodging markets seems widespread across all six states. Although very little improvement has materialized through Q1 of 2021, there are many indicators that growth in lodging demand is around the corner. The national lodging market has begun to see improvements as hotel occupancy for the week ending March 20 increased to its highest level since early March of last year, according to STR. There are many reasons to believe New England lodging markets will experience similar trends once tourism season is underway.

By Sebastian Colella, Vice President, Pinnacle Advisory Group

New England, Massachusetts, United States

Opinion Article

March 26, 2021

Operating Observations From 2020

In 2020, U.S. hotels suffered the worst year of operating performance since CBRE began tracking profitability in 1938. During the year, the average hotel in CBRE's monthly survey of U.S. operating performance experienced a 78 percent decline in Gross Operating Profits (GOP) and achieve the lowest GOP margin (19.7%) over the past 82 years. While hotels may have earned enough revenues to cover their direct operating expenses, it is likely that the average hotel did not generate any cash from operations to cover their debt service.

By Robert Mandelbaum, Director of Research Information Services, CBRE Hotels

Opinion Article

March 16, 2021

COVID-19’s Impact on the Tampa-St. Petersburg Lodging Market

Prior to March 2020, the Tampa and St. Petersburg (TSP) market had posted nine straight years of RevPAR growth. The depth of the market's demand generators and allure of this sunny market were continuing to grow at the start of the new decade. A firm commitment by major stakeholders (public and private) in recent years to the development of the region's amenity base, corporate relocations and expansions, stable and growing tech and finance sectors, population migration to the region, major infrastructure investments, development projects in Downtown Tampa and St. Petersburg, favorable weather, the presence of MacDill Air Force Base, and a host of other factors contributed to the attractiveness of the region to hoteliers, hotel brands, meeting and event planners, airlines, tourists, and other hotel guests.

By Jeffrey Pennington, Vice President at HVS Orlando, HVS

Tampa, Florida, United States

Opinion Article

March 15, 2021

Market Pulse: Washington, D.C. Lodging Market

The Washington, D.C. lodging market has historically been one of the most stable of the major U.S. markets given its status as the hub of national political affairs and the center of governmental action and policy, while also playing a major role in international affairs. Aside from the government-related activity, numerous industries and institutions have contributed to and supported the region, including finance, education, healthcare, and scientific research. While typically insulated from recessions and tourism declines, Washington, D.C. was not spared amid the ongoing worldwide pandemic in 2020.

By Chelsey Leffet, Managing Director, Northeast Leader, HVS

Washington, United States

Opinion Article

March 11, 2021

Manhattan Lodging Overview Summary – Q4 2020

The COVID-19 outbreak began affecting the New York City lodging market in late February 2020 and, in the months that followed, led to the virtual dissipation of traditional sources of lodging demand. As an international gateway city, the complete stoppage of inbound international flights and travelers is of particular note. Because of the reduction in travel across virtually all demand sources, this diversification has resulted in an even harder hit to New York than other smaller U.S. markets. Nonetheless, many reasons remain for optimism into 2021 as vaccine distribution ramps up and travel patterns begin to return to some normalcy.

By Chris Fernandes

New York, United States

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Opinion Article

March 11, 2021

HVS Market Pulse: Green Bay, the Home of the Packers

Green Bay, the third-largest city in Wisconsin behind Milwaukee and Madison, is best known for being home to the NFL's Green Bay Packers and their home stadium, Lambeau Field, and the market's hotel industry has reaped the benefit of the growth generated from the surrounding Titletown District. However, in 2020, the COVID-19 pandemic caused a significant decline in lodging demand given the restrictions set on sporting events and the limits on gatherings. While the Packers averaged a total attendance of 77,845 per game in the 2019 regular season,[1] fans were prohibited from attending home games during the 2020 season.

By Amy Schmidt, Senior Project Manager, Chicago, HVS

Green Bay, Wisconsin, United States

Opinion Article

March 8, 2021

HVS Market Pulse – Milwaukee, Wisconsin

Prior to the COVID-19 pandemic, Downtown Milwaukee was experiencing revitalization and growth over a period of nearly ten years. The year 2020 was expected to be one of Milwaukee's record years, with the Democratic National Convention scheduled for July. Given the reduction in attendance of this major one-time event and other citywide events that were forced to reschedule, RevPAR declined by 66%. Data provided by STR and Visit Milwaukee indicate that occupancy in Downtown Milwaukee dropped from 71.4% in 2019 to 32.5% in 2020. Meanwhile, average daily rate (ADR) declined from $144.10 in 2019 to $106.57 in 2020, reflecting a drop of roughly 26%. While these metrics are shocking, Milwaukee is poised to make a recovery that should be driven by area development projects, strong demand generators, and the highly anticipated expansion of the convention center.

By Justin Westad and Amy Schmidt

Milwaukee, Wisconsin, United States

Opinion Article

March 5, 2021

HVS Market Pulse: Indianapolis, Indiana

Downtown Indianapolis experienced record visitation in 2019, led by the city's impressive calendar of national conventions and major sporting events. The award-winning Indianapolis Convention Center (ICC), which features 749,000 square feet of exhibit space and twelve connected hotels, hosts several national conventions, expositions, and events every year. Lucas Oil Stadium (LOS), located adjacent to the ICC, is a 67,000-seat, multi-purpose, retractable-roof stadium that is home to the NFL's Indianapolis Colts.

By Kristen Gatti, Senior Project Manager, Chicago, HVS

Indianapolis, Indiana, United States

Opinion Article

March 4, 2021

Anchorage Lodging Market: Winter 2021 Update

Amid a worldwide pandemic, the Anchorage lodging industry continues to experience a downturn that is greater than the past two lodging-market declines combined. The major factors that have affected this market since the onset of the pandemic in March 2020 are highlighted below.

By Breanna Smith and Kasia Russell

Anchorage, Alaska, United States

Opinion Article

February 26, 2021

HVS Las Vegas Casino & Hotel Market Outlook 2021

The impact of the COVID-19 pandemic on the Las Vegas economy has been extremely harsh given the market's reliance on visitation and conventions. Following five consecutive years of accommodating more than 42 million visitors, Las Vegas hosted just over 19 million people in 2020 (the lowest number of visitors since 18.1 million in 1989). While vaccination rollouts have begun in Nevada, measures to curb the spread of the COVID-19 virus remain in place. Continued weak performance is anticipated through the first half of 2021. Thereafter, the recovery of travel and general economic performance is expected to accelerate as vaccines, medical therapies, and public confidence support the beginning of the return to pre-pandemic levels. Fortunately, construction is classified as an essential business in Nevada and has continued throughout the pandemic. New developments will contribute to the eventual recovery of the market.

By Shannon Okada, Managing Director of Gaming with HVS, HVS

Las Vegas, Nevada, United States

Opinion Article

February 19, 2021

HVS Market Pulse - Minneapolis-St. Paul

Prior to the COVID-19 pandemic, the greater Minneapolis-St. Paul region experienced significant increases in new supply and high levels of demand attributed to major one-time events such as Super Bowl LII in 2018 and the NCAA Men's Final Four Basketball Tournament in 2019.

By Justin Westad and Tanya Pierson

Minneapolis-St. Paul, Minnesota, United States