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The Plasencia Group Analysis Shows Tampa, Florida
Ready for Lodging Growth

By Ted Jackovics, Tampa Tribune, Fla.McClatchy-Tribune Regional News

Feb. 12.2012--TAMPA -- Tampa is one of nearly two dozen markets showing promise for investment in the lodging sector of the real estate industry, according to an analysis by The Plasencia Group Inc.

The 2012 outlook by the Tampa-based hospitality services company, which has seven U.S. offices, reflects a turnaround for the Tampa area, said Chairman and Chief Executive Lou Plasencia.

The recession forced a precipitous decline in room rates. But there is a good sign, Plasencia said, in Smith Travel Research data that show an 11.7 percent gain in revenue per available room to $54.31 in 2011 compared with 2010 is a good sign, Plasencia said.

"We will see very little new supply coming into the market other than some select service properties like a Holiday Inn Express or Fairfield Inn because construction financing is not available," Plasencia said.

"That bodes well for the time being to allow existing hotels to improve rates without fear of low introductory rates by a new competitor. But there will be sales and resales and we are getting phone calls from institutional investors seeking potential venues to acquire."

Still, Tampa could use more first-class hotels, Plasencia said. The area should receive plenty of attention hosting the Republican National Convention in August -- exposure that should pay off in the long run, he said.

Perhaps the best news from the Plasencia firm's appraisal is its optimistic outlook for the overall economy.

Some examples:

* That "every sensible economist in the U.S." believes there is little chance of another national recession in 2012.

* With $2 trillion in cash on their balance sheets, the most since 2007, U.S. businesses are considered to be well-positioned for expansion, investment and employment growth.

* With strong corporate balance sheets and deep cuts made in operating costs, U.S. businesses are perfectly positioned to make further investments and buyout acquisitions in 2012, driving economic growth.

* U.S. corporate earnings growth in 2012 is expected to be a healthy 8.5 percent.

* Standard & Poor's suggests a possible recession in Europe during the first half of 2012 but a "half-speed" recovery in the U.S. during that period.

* Foreign banks will make fewer commercial real estate loans in the U.S. in 2012, presenting an opening for U.S. banks to ramp up lending and greatly expand their market share.

"While we see promising improvements in the U.S. economy, the health of the lodging sector remains very dependent on macroeconomic factors well out of anyone's control," the report said.

But year-end performance and the lack of new hotel construction will allow the hotel industry to continue to raise rates.

Late last year, there was talk of a new hotel on property along the Hillsborough River just north of the Convention Center and another on part of a 450,000 square-foot office development on four city blocks proposed by Trammell Crow.

Plasencia reports labeled chances of both coming to reality "highly unlikely."


(c)2012 the Tampa Tribune (Tampa, Fla.)

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