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Consistently Ranked as the Number One Factor Affecting Hotel Investment and Lending Decisions |
New York- June 5, 2000 - Findings from Hospitality
2000: The Capital, a major international study released today by Arthur
Andersen, the New York University Center for Hospitality, Tourism and Travel
Administration, and Hospitality Financial and Technology Professionals,
reveal that investor attitudes toward hotel property are currently more
positive than negative.
Additionally, there is a strong preference toward international hotel chains, and a marginal preference for four-star versus five-star product. Hospitality 2000: The Capital explores current and future capital sources, market structures, investment and lending preferences, approaches to underwriting, investment metrics, property market trends and lender attitudes. The results were announced today during the 22nd Annual New York University International Hospitality Industry Investment Conference at the New York Marriott Marquis Hotel. Comments Roger Cline, a partner at Arthur Andersen who co-authored the study with Dr. Mark Warner of NYU, �The survey results across the board were indicative of greater awareness and experience with New Economy realities such as globalization, the revolution in communications, consolidation in the industry, and technology. Both investors and lenders appear to have similar preferences. They generally want to stay with quality and size when it comes to property, and seek large branded management companies to operate the business. The study confirmed a broad array of investment and underwriting parameters, and should be of great value to those evaluating capital commitments to the hospitality industry.� An overview of the findings:
With regard to the future popularity of hotel REITs in the United States, just over two thirds of Americas respondents believe that the REIT form will diminish in popularity either moderately (27%), or significantly (41%). Lender and investor attitudes toward tangible vs. intangible assets are beginning to shift. While respondents still have a preference for investing in hotel property, other types of assets come next, including brands, human capital, technology, customer information and strategic alliances. Most respondents indicate that measuring the return on intangible assets is important now, and will be in the future. Investor attitudes toward hotel property are currently more positive (52%) than negative (44%), with positives expected to increase in the future. On the enterprise side, the negatives for investors are currently marginally higher than those for property (47% versus 44%), while in the future, the positives are expected to increase to 66%. In Europe, the Middle East, India and Africa (EMEIA) and Asia-Pacific, individual investors and financial institutions are likely to have an increased appetite for hotel property and acquisition in the future. By region, hotel acquisition volumes are expected to increase the most in the Americas and EMEIA, and less so in Asia-Pacific.· As to foreign investment in hotel enterprises, EMEIA respondents indicate
the greatest prospect for increased investment (83%), while in Asia-Pacific
there is a more moderate view (67%), and in the Americas the most conservative
view (31%).
Summarizes Dr. Mark Warner, director for graduate programs, New York
University�s Center for Hospitality, Tourism and Travel Administration,
�This study makes a great textbook for a class on hospitality investment
and valuation. It sets a current and near-term view of the fascinating
and complicated world of hospitality capital.�
The School of Continuing and Professional Studies (SCPS) at NYU was founded 65 years ago as a separate school within the University. Today it is the leading and largest institution of its kind in the nation, with annual enrollments of nearly 70,000 in its many professional development and degree programs. SCPS is focused on serving individuals at any stage of life, and on providing professional education across a wide spectrum of industries that continually demand new sets of high-level skills. As the authoritative information source for hospitality finance and technology information, HFTP is the professional association for financial and IT personnel in the hospitality industry. The association provides continuing education and networking opportunities to more than 4,000 professionals around the world. In addition to producing the annual Hospitality Industry Technology Exposition and Conference (HITEC), HFTP also administers the examination and awards the certification for the Certified Hospitality Accountant Executive (CHAE) and the Certified Hospitality Technology Professional (CHTP) designations. HFTP was founded in 1952 as the National Association of Hospitality Accountants. Arthur Andersen�s vision is to be the partner for success in the new
economy.
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Antony Yee Hospitality and Leisure Services Arthur Andersen, San Francisco (415)281-8156 [email protected] http://www.arthurandersen.com www.scps.nyu.edu www.hftp.org |