News for the Hospitality Executive
Strategic Alliance Between Concord Eastridge and
PKF Consulting Target Hotels Caught in Downturn
ARLINGTON, Va. (May 18, 2009) – A new strategic alliance between a real estate company and a hospitality advisory firm is targeting hotel owners and asset managers caught in the economic downturn. Concord Eastridge, Inc. and PKF Consulting created the alliance to help ailing hotels improve their market position, complete the construction of a hotel or find buyers for projects on the brink of foreclosure.
“Many hotel owners are scrambling to stay afloat, much less preserve RevPar (revenue per available room), in this economic environment,” said Susan Eastridge, CEO of Concord Eastridge, a national real estate development firm.
Eastridge said these owners need to take action immediately to fortify their positions, generate demand and improve profitability within a short period of time.
“These hotels were booming when times were good, but with current market conditions, everyone is struggling to one degree or another,” she said. “When a hotel is in trouble, the owners need to make a change, and sometimes, that’s a difficult thing to accomplish internally.”
According to analysis by PKF Consulting, published January 9, 2009, the combination of a weak economy and rising levels of supply have caused one of the deepest and longest recessions in the history of the domestic lodging industry. As a result, the number of full-service U.S. hotels lacking the cash flow needed to pay their debt will increase by 25 percent in 2009, and property values will likely decrease another 20.1 percent (after a 14.1 percent decline in 2008). As of March 2009, PKF Hospitality Research is forecasting that the average U.S. hotel will experience a 13.7 percent decline in the revenue received from the rental of guest rooms in 2009, after having already declined an estimated 1.8 percent in 2008.
“We’re looking at a market that is not expected to return to a state of stability for several years,” said David Arnold, CEO-East of PKF Consulting, a leader in providing hospitality valuation, analysis and research. “Hotel owners and asset managers will be asking themselves some tough questions over the next year. Should they remodel, revise prices or change management brands? Is it worth finishing the construction of a hotel? How can I increase my RevPAR? Should I sell some or all of my hotel assets?”
The strategic alliance between Concord Eastridge and PKF Consulting was designed to help owners and asset managers answer those questions, Eastridge said.
“The experience of our hospitality development team and the capabilities that PKF offers allow us to provide a complete set of services to hospitality properties that would ordinarily be accomplished by several independent consultants. Our one point of contact saves time and money, two things you can’t have enough of,” Eastridge said.
The Concord Eastridge/PKF Consulting alliance offers services to hospitality asset owners that include:
For more information, contact Mike Fahner or Mike Haller with Concord Eastridge at (877) 850-5070; or Dave Arnold with PKF Consulting at (215) 563-5300.
PKF Consulting provides financial and market studies and valuations involving hotels, resorts, restaurants, golf courses, and a variety of mixed-use development and other hospitality products. The firm is the only hospitality consulting firm with its own proprietary database of U.S. and international hotel financial statistics. Headquartered in San Francisco, the firm has offices in Atlanta; Boston; Bozeman, Mo.; Dallas; Houston; Indianapolis; Los Angeles; Miami; New York; Philadelphia; Seattle; Sacramento, Calif.; and Washington, DC. For more information, visit www.pkfc.com.
Concord Eastridge, Inc. is a national real estate firm and a leader in public/private and mixed-use development in association with universities and colleges, public entities, not-for-profit organizations and other institutions. The firm develops a variety of commercial and multi-family residential projects for its own account with a robust portfolio of private development projects that complements its public/private development endeavors. Concord Eastridge has offices in Arlington, Va.; Orlando, Fla.; and Scottsdale, Ariz. For more information, visit www.concordeastridge.com.