News for the Hospitality Executive
(Los Angeles) January 23, 2013 – Despite political gridlock in Washington, DC, and some concerns about economic growth, an extraordinary number of US hospitality executives expect their industry to perform well in 2013, according to DLA Piper’s 2013 Hospitality Outlook Survey, which was revealed today at the Americas Lodging Investment Summit. With that in mind, US hospitality industry executives are also optimistic that market conditions have created especially good opportunities for investors on the hunt to buy hotels in 2013.
The survey, measuring the attitudes and perspectives of top executives within the hospitality industry, reveals that 84 percent of respondents describe their 12-month outlook for the US hospitality industry as “bullish,” the highest recorded since 2011 when 88 percent of respondents described themselves as bullish. This is the fifth consecutive year that DLA Piper has conducted its research on behalf of the hospitality industry.
According to respondents, fueling their optimism is confidence that the broader US economy will continue its steady, albeit modest, growth. Others cite increased growth in business and convention-related travel, as well as projected strength for hotel transactions.
Taking a look at the operational side, most of the people surveyed expect hotel real estate values to rise at least somewhat in 2013. Respondents also have a broad expectation that hotel operators will succeed at boosting room rates.
On the other hand, a few things are tempering executives’ enthusiasm, primarily political gridlock in Washington. When the survey was conducted in December, more than half of respondents believed that the “fiscal cliff,” if not averted, would be a significant deterrent to deal making in 2013. Even after a deal was reached, many respondents said the deal had failed to decisively solve the country’s fiscal problems.
“Enthusiasm for the hospitality industry remains high, however the tense situation in Washington and its possible effects on the hospitality industry remain top concerns,” said Sandra Kellman, global co-chair of DLA Piper’s Hospitality and Leisure practice. “Looking ahead, it is clear that the industry has an ‘on-with-the-show’ mentality given projected strength for hotel transactions, the price of US hotel assets rising and gaining momentum, and hotel operators potentially raising rates.”
According to DLA Piper, the survey yielded a number of other interesting conclusions, including:
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