May 20, 2004 - Lodging Econometrics (LE) released its Sales and Pricing Trends Report for 2003, showing that 573 hotels with reported selling prices, having 79,790 rooms, were traded.  Total sales amounted to a record $5.6 billion.  The average selling price per room was $70,308 � a 16% increase off the cyclical bottom established in �02.

When all transactions were accounted for, including merger and portfolio acquisition activity � 850 hotels with nearly 120,000 rooms changed hands having a total value of a record high $8.5 billion!

�It was a banner year for transactions,� said Patrick Ford, President of LE.  �There were 573 fee-simple transactions in 2003 � just 14 fewer than the high of 587 set in �02.  But the average hotel size, at 139 rooms, and total sales proceeds, at $5.6 billion, set records.�

The driver behind these record-setting results was an unusually large number of individual transactions greater than $10 million each.  LE reported that in �03, 133 hotels were sold for at least $10 million each, compared to 76 in �02.  �Opportunity funds and equity groups purchased properties that had faltered during the travel downturn and were being pruned from investor portfolios,� said Ford.  �Many had strong locations, were in need of reinvestment for renovation and repositioning, and were ultimately reflagged to stronger brands in order to take advantage of an economy on the upswing.  For groups with the financial capability to enter the market, history will eventually show this to have been a period of great opportunity to acquire these assets.�

The average size of all properties sold increased to 139 in 2003 from 116 rooms in 2002.  163 hotels larger than 150 rooms changed hands in �03, up 45 hotels over �02.  Conversely, the number of transactions under 150 rooms fell by 59 hotels to 410.

Ford expects transaction volume to fall slightly in �04.  Unless there are extenuating circumstances, those who own lodging real estate today, are likely to continue to hold.  �This is the 11th consecutive month of improved operating performance, and with a rapidly recovering economy, owners are likely to postpone selling and take real estate profits at a later time,� said Ford.  This is particularly true for high-end assets which, more than ever before, are held by public companies who are traditionally longer-term holders.

Attitudes about selling are somewhat different for owners of smaller-sized properties, in the lower chain scales.  In that end of the market, transaction activity, although fluctuating, is always relatively brisk.  Capital is generally available for smaller transactions.  The market is fluid.  There are infinitely more investors looking for smaller-sized properties including those opportunities that can be re-positioned either up or down market.  Ford expects transaction volume for smaller properties to remain at high levels.

Acquisition/disposition officers, asset managers, appraisers, consultants, market analysts, brokers and lenders will find LE�s Sales and Pricing Trends report useful for analyzing directional trends over the last six years.  Lodging real estate values and transaction volume are presented by brand, chain scale, region, location, size of property, and size of transaction.  Ford commented, �Sales and Pricing Trends perfectly portray cyclical tops and bottoms, are ideal for the market timing of acquisitions or dispositions, and are often used in conjunction with individual Sales Comps when conducting an analysis.�

LE�s Sales and Pricing Trends and/or individual Sales Comps can be purchased by calling Shawn Ford at (603) 431-8740, ext. 21 or going to our website at http://www.lodgingeconometrics.com.

Lodging Econometrics (LE), of Portsmouth, NH is the industry authority for hotel real estate, offering comprehensive Individual Project Records for over 65,000 hotels throughout the country � for every Open and Operating Hotel; every project in the Development Pipeline, including New Construction, Conversion/Reflaggings and Announced Renovations; and for all Real Estate Transactions and Merger Transfers.