Markets & Performance USA & Canada Opinion Articles - Hospitality Net

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Opinion Article

April 16, 2020

Putting the Past to Use Redux - Expense Elasticity in a Downturn

Like restaurants and airlines, hotels offer experiential, temporal products that cannot be inventoried. The COVID-19 pandemic has temporarily reduced hotel demand to near zero; meanwhile, inventory continues to stream into the void unused. Thus, the hotel industry is experiencing unprecedented year-over-year hotel revenue losses. How long the direct impacts will continue remains to be seen, as does the collateral long-term impact; however, a significant RevPAR loss in 2020 is certain, and most experts expect post-pandemic results to remain below the pre-crisis benchmark year of 2019 for several years.

By Erich Baum, Senior Vice President, HVS

Opinion Article

April 16, 2020

Examining changes in RevPAR, profit in past recessions

CBRE Hotels Research was projecting a 1.1% increase in revenue per available room for the year. Even with this low level of revenue growth, there were certain factors that could have sustained—or at least cushioned the blow of minimal declines—the nine-year trend of profit growth for U.S. hotels since 2010.

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

Opinion Article

April 8, 2020

Boston & Cambridge Lodging Market: COVID-19 and Its Impact on Supply

Life across the United States has changed dramatically in the last four weeks. In Boston, and almost every other city in the country, hotel owners and operators have been forced to make the difficult decision to close temporarily while the country attempts to slow and contain the spread of COVID-19. In Massachusetts those decisions were partially made for them on March 31st.

By Sebastian Colella, Vice President, Pinnacle Advisory Group

Boston & Cambridge, Massachusetts, United States

Opinion Article

April 7, 2020

Will Airbnb guests want to stay in chain hotels instead when the pandemic is over?

COVID-19 hit the economy so hard that it could take three years for the U.S. to recover.

By Linchi Kwok, Professor and Department Chair, CAL Poly Pomona

Opinion Article

April 2, 2020

U.S. Hotels Changes in RevPAR and Profits During Historical Recessions

The U.S. lodging industry was prepared for a slowdown in performance entering 2020. CBRE Hotels Research was projecting a 1.1 percent increase in RevPAR for the year. Even with this low level of revenue growth, there were certain factors that could have sustained - or at least cushioned the blow of minimal declines - the nine-year trend of profit growth for U.S. hotels since 2010.

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

Opinion Article

March 27, 2020

Boston & Cambridge Lodging Market: Coronavirus Causing Steep Demand Declines, Closures, Layoffs

As travel across the country and the world has all but stopped the last few weeks from the threat of COVID19, hotels across the country saw an unprecedented amount of cancellations. The Boston lodging market has been one the hardest hit markets in the United States with demand declining dramatically throughout most of March.

By Sebastian Colella, Vice President, Pinnacle Advisory Group

Boston & Cambridge, Massachusetts, United States

Opinion Article

March 12, 2020

After A Decade Of Growth And Recovery, What’s Next?

Looking back at the past always helps to give an indication of what the future may hold. The hotel industry has shown tremendous growth in all metrics since 2009.

By Joseph Pierce, Director of Appraisal & Consulting Services, Hotel & Leisure Advisors (H&LA)

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Opinion Article

March 2, 2020

HVS Market Pulse: Detroit, MI

The Motor City continues to benefit from an improved reputation driven by development efforts among economic power houses such as Ford, Fiat Chrysler America (FCA), and General Motors (GM). However, Detroit's economy has become more diverse since the economic lows of 2013 when the City filed for bankruptcy. The financial, healthcare, and education sectors have solidified their presence, while the technology sector has become a focus of growth.

By Brandon Leversee, Vice President with HVS Detroit, HVS

Detroit, Michigan, United States

Opinion Article

February 28, 2020

HVS Market Pulse: Cape Cod

As with most leisure markets, particularly those driven by weather, the Cape Cod market has a high degree of seasonality. In the last three years, peak-season August occupancy levels have averaged in the mid-80s, while low-season January occupancy levels have averaged in the low 20s. Both local hoteliers and the Cape Cod Chamber of Commerce have been mildly successful in expanding shoulder seasons in April, May, September, and October.

By Roth Johnson, Project Manager with HVS Boston, HVS

Cape Cod, Massachusetts, United States

Opinion Article

February 27, 2020

HVS Market Pulse: Minneapolis-St. Paul Lodging Market Perceptions

For this article, we will focus on three major submarkets within the Twin Cities metro area: Minneapolis, St. Paul, and Bloomington. These three cities host the largest inventory of hotel rooms, and each offer their own unique amenities and demand generators necessary for the successful operation of a hotel.

By Justin Westad and Tanya Pierson

Minneapolis-St. Paul, Minnesota, United States

Opinion Article

February 25, 2020

Amazon in Music City: The Anticipated Impact on the Lodging Industry

Following a nearly year-and-a-half Request for Proposal (RFP) process, Amazon announced that it would split the location of its new HQ2 campus between Long Island City, New York, and Crystal City, Virginia. The company also unexpectedly announced an additional, smaller office called the Center for Operational Excellence in Nashville, Tennessee. Following intense pushback from residents and local politicians in NYC, Amazon withdrew from Long Island City, which left just Crystal City in Virginia as the company's new HQ2 location.

By Marc Greeley and Benjamin Levin

Nashville, Tennessee, United States

Opinion Article

February 24, 2020

HVS Central Florida 2020 State of the Hotel Market

Orlando has long been distinguished as an iconic vacation destination by continuing its ranking as the No. 1 destination in the United States, according to Visit Florida. Since 2013, Orlando has reigned as the nation's "Most Visited Tourist Destination." With multiple factors driving Orlando's appeal, hotel investors and developers are curious as to what is on the horizon for the hospitality market in Central Florida.

By Donald C. Stephens Jr., Managing Director of HVS Orlando Consulting & Valuation, HVS

Florida, United States

Opinion Article

January 29, 2020

HVS Market Pulse: Kalispell and Whitefish, Montana

Due to Kalispell's proximity to Glacier National Park, the region's local economy is largely tied to tourism and is highly seasonal. Kalispell is home to 22 open and operating hotels, encompassing 1,885 guestrooms. Of those 22 hotels, four of them (totaling 348 guestrooms) have opened in the last six years, accounting for an 18% increase in hotel rooms in less than a decade. These new properties include a SpringHill Suites by Marriott, Country Inn & Suites by Radisson, and MyPlace, which opened in 2016, 2018, and 2019, respectively. The property types in this market range from economy to upscale, as outlined in the table below.

By Desiree Flanary and Lauren Reynolds

Kalispell and Whitefish, Montana, United States

Opinion Article

January 23, 2020

Do Dual-Branded Hotels Outperform Single-Branded Hotels?

Dual branding of hotels has become a growing industry practice. Beyond the potential marketing benefits of the dual-branding strategy, this paper tests whether dual-branded hotels operate more efficiently than comparable single-branded hotels (and therefore deliver better bottom-line results). Comparing a proprietary longitudinal data set on the operating performance generated by dual-branded hotels in the U.S. against a set of comparable single-branded hotels, we document mixed results.

By Chekitan S. Dev and Eva Steiner

Opinion Article

December 30, 2019

2019 HVS Performance Report: Spa Department

On average, spa and wellness departments run profitably and can contribute significantly to a hotel's bottom line. This report is our second annual performance report published by HVS that tracks and monitors spa department performance and profitability. The data presented reflect spa operating-statement averages and data points from 2018 through the third quarter of 2019.

By Rodney Clough, President - HVS Americas, Denver, HVS

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Opinion Article

December 24, 2019

Alternative Accommodations Likely to Bring Continued Disruption to Hotel Industry in 2020

The alternative accommodation business is a significant hotel industry disruptor and is becoming increasingly institutionalized characterized by sophisticated revenue management, multi-unit management companies, and talks of IPO's. According to Mary Jo Finocchiaro, Executive Vice President and Chief Financial Officer for BRE Hotels & Resorts, "The alternative accommodation trend is expected to continue to grow but facing headwinds with the threat of expanding regulation on the horizon."

By Mary Jo Finocchiaro, Executive Vice President & Chief Financial Officer, BRE Hotels & Resorts

Opinion Article

December 24, 2019

HVS Market Pulse: Boise, Idaho

Boise, the Gem State's capital, awarded the title of Americas' fastest-growing city by Forbes magazine in 2018,[1] has continued to show robust economic growth in 2019. Key developments include a major announcement in Nampa, expansions occurring at Boise Airport, and a steady events/convention calendar for the upcoming year at the Boise Centre. The greater Treasure Valley is poised for further growth, fueled by the development of the announced Amazon fulfillment center coming to Nampa, a Boise suburb.

By Eileen Bosworth, Senior Project Manager, Portland, HVS

Boise, Idaho, United States

Opinion Article

December 20, 2019

HVS Industry Statistics Update – Q4 2019

Occupancy levels across the U.S. remained generally stable through October 2019, while ADR registered a marginal increase of less than 1%. Research suggests that RevPAR will end 2019 below the 1% mark; this represents a further year-over-year deceleration in RevPAR, which has been the general trend since 2015. The continued entrance of new supply and the slowdown in job growth are the primary factors contributing to the recent trend. Supply is anticipated to continue to increase by nearly 2% in 2020, which will likely outpace demand growth.

By Jerod Byrd, Senior Vice President, Partner and Director of Operations of the HVS Philadelphia Consulting and Valuation division, HVS

Opinion Article

December 19, 2019

2020 United States Hotel Industry Outlook

The U.S. economy continues to hold strong, showing great resiliency. The overall strength in consumer spending and confidence has benefited the U.S. hotel industry, as well, driving gains in hotel demand, although not at quite a high enough level to balance the new supply that opened in 2019. As such, occupancy is forecast to decline slightly in 2019, while ADR gains will keep RevPAR change in the positive column.

By Rodney Clough, President - HVS Americas, Denver, HVS

Opinion Article

December 13, 2019

The Hotel and Resort Macroeconomic Outlook for 2020 and 2021

As 2020 rapidly approaches and the hotel industry is wrapping up its 10th consecutive year of growth since the Great Recession, hospitality industry professional MaryJo Finocchiaro, Chief Financial Officer at BRE Hotels & Resorts, offered her opinion on the hotel macroeconomic outlook for the coming year and beyond.

By Mary Jo Finocchiaro, Executive Vice President & Chief Financial Officer, BRE Hotels & Resorts