Markets & Performance USA & Canada Reports

January 25, 2020

Hotel Values Moderate, Cap Rates Stable

Despite increasing concerns about a global economic slowdown, the trade war, and geopolitical risks, the U.S. hotel transaction market remained healthy and active in 2019. According to preliminary data generated by Real Capital Analytics (RCA), total sales volume declined by 15%, from $43.6 billion in 2018 to $37.1 billion in 2019, though as will be illustrated, the decline was due primarily to lower portfolio sales activity.

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

United States

Report

December 17, 2019

Luxury Hotels: Elevated Occupancy and Expenses

Despite the relatively high cost of construction and complexity of operations, developers are still attracted to owning and managing luxury hotels. As of August 2019, STR reports that just 0.7 percent of the hotels (2.3% of rooms) in the United States are chain-affiliated luxury hotels. Concurrently, the STR pipeline report shows that 1.2 percent of the properties (2.9% of rooms) either under construction or planned for development meet this criterion.

By Mark Woodworth and Robert Mandelbaum

United States

Report

November 13, 2019

Context matters: HSMAI members on signs of a downturn

Where the industry stands in terms of a downturn remains a question for many, and sales and marketing experts are no exception. During a recent think tank held in conjunction with the Hospitality Sales and Marketing Association International's Sales Leader Forum near Dallas, Allison Handy, SVP of sales, marketing and revenue optimization at Prism Hotels & Resorts, posed this question: "Is our industry creating its own recession?"

HotelNewsNow

United States

Report

August 20, 2019

U.S. Hotel Interest Coverage

According to the March 2019 edition of CBRE's Hotel Horizons® forecast report, RevPAR growth for the U.S. lodging industry will be limited to under 2.5 percent through 2020. Further, CBRE is projecting a 0.6 percent decline in RevPAR for 2021 as CBRE expects the economy to slow down during the year. The combination of modest increases in revenue and rising operating expenses (especially labor) make hotel owners and operators nervous about their ability to enjoy profit growth the next few years.

By Jack Corgel and Robert Mandelbaum

United States

Report

March 18, 2019

HVS Market Pulse: Detroit, MI

Detroit's image of a proper rust-belt city in the depths of despair during the Great Recession and the subsequent filing of bankruptcy in 2013 has been reshaped into an inspiring story of resilience and resurgence. Detroit's economy is strong, with unemployment decreasing every year since 2014 and an employment base that continues to diversify. While the economic mainstays—General Motors, Ford, and Fiat Chrysler—still thrive in the city, other major employers belong to the financial and healthcare sectors; moreover, the technology sector continues to grow.

By Brandon Leversee, Vice President with HVS Detroit, HVS

Detroit, Minnesota, United States

Report

March 1, 2019

HVS Market Pulse: Minneapolis - After the Super Bowl

Surrounded by the beauty of lakes and the Mississippi River, Minneapolis is home to many Fortune 500 companies and more than 11,000 hotel rooms. High quality of life, diversity of employers, and leisure attractions continue to entice demand and an ensuing level of hotel development to the area.

By Tanya Pierson and Justin Westad

Minneapolis, Minnesota, United States

Report

February 13, 2019

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.

The Wall Street Journal

United States

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Report

December 21, 2018

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

United States

Report

October 22, 2018

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

United States

Report

October 4, 2018

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.

United States

Report

September 20, 2018

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.

TravelClick, Inc.

United States

Report

September 20, 2018

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

United States

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Report

September 7, 2018

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.

United States

Report

August 23, 2018

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

Phoenix, Arizona, United States

Report

July 24, 2018

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

Tucson, Arizona, United States

Report

July 17, 2018

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

United States

Report

May 31, 2018

U.S. Hotel Rates and Bookings Continue Growth Throughout First Half of 2018 - TravelClick Reports

TravelClick, a leading global provider of data and revenue-generating solutions for hoteliers, today released new data from the Company's May 2018 North American Hospitality Review (NAHR). According to this data, North American hoteliers continue to experience significant growth in the second quarter of 2018 across all travel segments, up 2.7 percent in average daily rates (ADR) and 1.4 percent in bookings.

TravelClick, Inc.

United States

Report

May 8, 2018

HVS Market Pulse: Lake Charles Metro Area

The following article outlines the impact of industrial growth in Metro Lake Charles on the area's hotel industry.

By Bunmi Oyinloye, Senior Vice President, Leader - Houston Office, Houston, HVS

Lake Charles, Louisiana, United States

Report

April 30, 2018

Market Pulse: Annapolis, MD

Annapolis, Maryland's capital, is a historic seaport located 30 miles south of Baltimore and 30 miles northeast of Washington, D.C. Annapolis relies on tourism, state and local government activity, and renowned institutions of higher education for its economic livelihood. The Annapolis hotel market has been very stable over the last five years, with no proposed hotel development on the horizon. There have, however, been two hotel transactions in the last year, indicating the attractiveness and economic viability of this high-barrier-to-entry market to investors. Average rates for the city's hotels have risen steadily since the recession given the limited entrance of new supply, coupled with economic development in Annapolis and Anne Arundel County, as well as overall growth in the Washington, Baltimore, and the greater Mid-Atlantic region. The following article highlights several the fundamentals of the Annapolis economy and lodging market, as well as area development projects.

By Marcus Lee and Chelsey Leffet

Annapolis, Maryland, United States

Report

April 24, 2018

The Outlook For U.S. Hotel Profits In 2018

Since 2014, U.S. lodging industry owners and operators have seen a steady decline in the pace of revenue growth. In 2014, rooms revenue per available room (RevPAR) increased by a healthy 8.2 percent according to STR. Per the December 2017 edition of CBRE's Hotel Horizons®, RevPAR is forecast to increase by just 2.5 percent in 2018. Facing lackluster revenue growth, hotelier's sights are now focused further on down the operating statement to determine what the impact of slow top-line gains will be on bottom-line profits.

By Robert Mandelbaum and Bram Gallagher

United States