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Mainland Europe Hotels Enter Q4 With Positive GOPPAR Growth

HotStats | December 13, 2019

Mainland Europe hoteliers celebrated a positive start to the last quarter of 2019. October marked the second consecutive month—and third month of the year—of growth in profit per available room compared to the same period last year, according to HotStats data. A strong top line drove the 1.2% YOY increase in GOPPAR. In the rooms department, a combination of occupancy (up 1.0 percentage points YOY) and average rate (up 0.1% YOY) led to a 1.5% increase in revenue per available room. This positive trend was replicated across other revenue centres. Specifically, F&B revenue, which achieved 1.0% YOY growth on a per-available-room bas...

In Focus – Skiathos

Manos Tavladorakis | December 13, 2019

By Manos Tavladorakis, Pavlos Papadimitriou Introduction The Sporades are an island complex along the east coast of Central Greece, northeast of the island of Euboea, in the Aegean Sea. They consist of 24 islands, four of which are permanently inhabited, namely Alonnisos, Skiathos, Skopelos and Skyros. Skiathos is the westernmost island in the Sporades group, east of the Pelion peninsula in Magnesia on the mainland, and west of the island of Skopelos. Skiathos Map Source: Greecetravel.com Island of Skiathos The island has an area of 49,90 km² and a permanent population of 6.088 (2011) inhabitants, with the majority living in Skiath...

The Hotel and Resort Macroeconomic Outlook for 2020 and 2021 / MaryJo Finocchiaro

MaryJo Finocchiaro | December 12, 2019

BOCA RATON, Fla., Dec. 12, 2019 - As 2020 rapidly approaches and the hotel industry is wrapping up its 10th consecutive year of growth since the Great Recession, hospitality industry professional MaryJo Finocchiaro, Chief Financial Officer at BRE Hotels & Resorts, offered her opinion on the hotel macroeconomic outlook for the coming year and beyond. "Hotel upcycles typically last for no more than a decade before the industry encounters a period of softening in demand and we're approaching that in the coming year," Finocchiaro said. "Additionally, socioeconomic and geopolitical events have also historically plagued the broader macroeco...

Asia Pacific’s Hotel Construction Pipeline, Excluding China, Continues in a Topping-Out Formation

Lodging Econometrics | December 10, 2019

December 10, 2019 – PORTSMOUTH, NH – In the recently released report from analysts at Lodging Econometrics (LE), Asia Pacific’s total construction pipeline, excluding China, continues in a four-quarter topping out formation with 1,779 projects/389,830 rooms, up 2% and 6% respectively, year-over-year (YOY). The region currently has 958 projects/221,927 rooms under construction. There are 391 projects/78,032 rooms scheduled to start construction in the next 12 months and 430 projects in the early planning stage with room counts at an all-time high of 89,871 rooms. Brand conversions are also at an all-time high. Excluding China, the ...

China’s Hotel Construction Pipeline Has Grown to Record High

Lodging Econometrics (LE) | December 5, 2019

December 05, 2019 – PORTSMOUTH, NH – Analysts at Lodging Econometrics (LE) report that at the end of the third quarter of 2019, China’s total construction pipeline has grown to 3,380 projects/628,972 rooms. Currently, the country has 2,548 projects with 438,797 rooms under construction with projects scheduled to start construction in the next 12 months at 404 projects with 85,026 rooms. Projects in the early planning stage have 428 projects/105,149 rooms. Hotel development continues to thrive despite the continued economic struggles in the region and the on-going trade and tariff disputes with the United States. In the third quarter,...

CBRE Issues U.S. Lodging and 2020-2021 Historic Hotels Forecast at Historic Hotels of America Annual Conference

Historic Hotels of America® | December 4, 2019

Historic Hotels forecast 1.2% advance in market RevPAR is better than the national projection of 0.8% increase for Upper-Upscale and Luxury Hotels. WASHINGTON, DC – December 4, 2019 The outlook for the U.S. lodging industry continues to be less strong than prior years, according to CBRE Hotels Research (CBRE), but Historic Hotels RevPAR will be impacted less and be relatively stronger than other segments of the industry over the next two years. For the sixth consecutive year, CBRE Hotels Research presented a Historic Hotels of America – CBRE two-year forecast at the Historic Hotels of America annual conference. CBRE relies on histor...

U.S. GOPPAR Turns Negative After Recent Gains

HotStats | December 3, 2019

Two consecutive months of profit gain were spoiled as the start of the fourth quarter brought with it a year-over-year downturn in GOPPAR for U.S. hotels. According to HotStats data, GOPPAR in October was down 2.8% versus the same month last year, a symptom of expense creep and a dive in top-line revenue. The negative turn comes on the heels of two months of positive YOY profit gains. Year-to-date GOPPAR is down 0.3% and down 0.7% on a rolling 12 months. RevPAR for the month was down 2.1% YOY, the result of a 1.8% YOY drop in average room rate and a 0.3-percentage-point dip in occupancy. The decrease in rooms revenue, along with a...

Canadian Lodging Outlook Quarterly 2019-Q3

HVS Canada | November 27, 2019

RevPar growth across Canada is flat through the third quarter of 2019. On a provincial level, BC leads the pack with over 3.0% growth with Quebec on its heels at 2.5%. Newfoundland struggles to absorb new supply with a near 6.0% decline and Manitoba's softer market leads to a 3.0% decrease. HVS and STR are pleased to provide you with the quarterly report of the Canadian Lodging Outlook.  Each report includes occupancy (occ), average daily rate (ADR), and revenue per available room (RevPAR) for six major markets. Source: STR   Source: STR If you would like a detailed hotel performance data for all of Canada, STR offers their Ca...

HVS Market Pulse: Interstate 5 Corridor Tourism Destinations in Oregon

Breanna S. Smith | November 26, 2019

By Breanna S. Smith, Lauren Reynolds Salem Salem, the state capital of Oregon, has not historically been known as a tourism destination. However, in recent years, the city’s local economy has diversified to include manufacturing, distribution, and technology. Thus, with the expansion of economic drivers and the increased population, Salem has entered a period of revitalization in order to offer more retail, dining, and entertainment facilities. This has also increased Salem’s attractiveness as a tourism destination. Furthermore, a vision for the rejuvenation of one the premier attractions in the area, Riverfront Park, is fostering high ...

HVS Market Pulse: Madison, Wisconsin

Dana Floberg | November 25, 2019

By Dana Floberg Madison, the state capital and seat of government for the state of Wisconsin, is home to a diverse economy, including education, healthcare, insurance, government, and technology. Although long home to the University of Wisconsin – Madison and American Family Insurance, it was the growth of Epic Systems Corporation and other healthcare technology companies and services that spurred downtown hotel and residential development over the last ten years. Increased demand for highly educated workers led to greater retention in the market of recent college graduates and improvements in quality of living. Government, Commercial, ...

The Latin America Hotel Construction Pipeline Room Count Up Slightly Quarter Over Quarter

Lodging Econometrics (LE) | November 22, 2019

November 22, 2019 – PORTSMOUTH, NH – In the recent Latin America construction pipeline trend report from Lodging Econometrics (LE), the total construction pipeline stands at 723 projects/131,075 rooms. Pipeline room counts are up slightly at 4%, year-over-year (YOY), and are still near all-time lows. However, the luxury stage at 86 projects/15,366 rooms and upper upscale at 101 projects/21,072 rooms are at the highest levels ever recorded by LE. Projects presently under construction stand at 334 projects/60,720 rooms. Projects scheduled to start construction in the next 12 months stand at 205 projects/35,199 rooms, up 5% and 15% respec...

The Current Impact of Brand PIP Requirements on Hotel Sales

Eric Guerrero | November 22, 2019

By Eric Guerrero The most consistent issue HVS Brokerage & Advisory has encountered during transactions is whether a group is budgeting sufficient capital for prospective asset acquisitions that require PIP renovations. An incorrect estimate means buyer groups must increase their capitalizations or request a price reduction on a dollar-for-dollar basis relative to their cost increases. This ultimately changes many metrics late in acquisition processes and lowers IRRs because any extra capital is drawn entirely from equity and not a blend of equity and debt. Recent observations are detailed below. The lesson is that accurate PIP estimat...

Equity Yield Rates on the Decline

Katy Black | November 21, 2019

By Katy Black and Rodney Clough HVS continually tracks the rates of return on the assets on which we consult. In our most recent review, we found that equity yield rates, on average, have shown a continued trend of decline in the full-service and luxury hotels sector, as well as the lower-tier limited-service sector, with the select-service and upscale limited-service sector showing stability. Equity yield rates were notably lower for full-service and luxury hotels, averaging 16.4% for the year-to-date 2019 period, which is 140 basis points (bps) below the 17.8% most recent peak level recorded in 2017. This decrease was driven largely b...

U.S. Lodging Industry Is Healthy, But Growth Is Slow Through 2021

CBRE Group, Inc. | November 20, 2019

Atlanta – November 20, 2019 – CBRE Hotels Research forecasts that revenue growth will continue to diminish, but the U.S. lodging industry will remain strong through the next two years.  As outlined in the December 2019 edition of Hotel Horizons®, U.S. occupancy levels will dip slightly, but remain above 65.5 percent through 2021, 300 basis points greater than the STR long-run average.  Concurrently, rooms revenue per available room (RevPAR) is forecast to increase at less than 1 percent per year during the same timeframe. “Throughout the recovery from the Great Recession, we have seen the U.S. lodging industry deviate from economi...

What Happens When Government Per Diems Change?

the Authors | November 19, 2019

By Bram Gallagher Ph.D. and Aman Patel Because federal government employees purchase a significant quantity of hotel rooms, the General Services Administration (GSA) has partnered with Federal Travel Regulation (FTR) compliant accommodations to provide federal travelers with per diem hotel room rates for select high-volume travel destinations in and outside of the Continental United States. These federal guidelines frequently serve to determine the hotel per diem allowances for state and local government travelers as well. Using the federal government per diem as guidance, individual properties and hotel chains set special room rates to...

Marriott Dominates the U.S. Construction Pipeline Followed by Hilton and IHG

Lodging Econometrics (LE) | November 18, 2019

November 18, 2019 – PORTSMOUTH, NH – In the Lodging Econometrics (LE) fall report for 2019, the franchise companies dominating the United States hotel construction pipeline are led by Marriott International with 1,484 projects/196,023 rooms, up 8% by projects and rooms year-over-year (YOY). Next is Hilton Worldwide currently at 1,373 projects/153,408 rooms and InterContinental Hotels Group (IHG) with 960 projects/98,139 rooms. Pipelines are very strong for these companies. Both Marriott and Hilton’s total pipelines are near all-time highs, as are hotels under construction, with Marriott setting a record high. The leading brands in...

UK Q3 Ends on High Note With RevPAR and GOPPAR Gains

November 14, 2019

The third quarter ended on a high note for U.S. hotels, as September profit per room climbed year-over-year, indication that the current cycle still has teeth. GOPPAR in the month was up 1.9% over the same time last year, part of a third quarter that saw profit grow 0.2%, dragged down by a challenging July when GOPPAR decreased 2.0% YOY, according to data from HotStats. September’s bottom-line rise was fueled by a 1.1% YOY jump in RevPAR, led wholly by a 1.4% increase in average room rate. Occupancy for the month was down 0.3 percentage points YOY. The corporate segment led the growth in RevPAR, with a stout 5.1% YOY increase in ra...

Canada’s Hotel Construction Pipeline Ascends to a Record High With a 28% Increase in Rooms Year-Over-Year

Lodging Econometrics | November 13, 2019

November 13, 2019 – PORTSMOUTH, NH – At the close of the third quarter of 2019, analysts at Lodging Econometrics (LE) report that the total construction pipeline in Canada soared to an all-time high with 289 projects/38,453 rooms. Construction pipeline projects are up 17% and rooms are up a remarkable 28% year-over-year (YOY). Currently, there are 85 projects/10,337 rooms under construction. Projects scheduled to start construction in the next 12 months have experienced an extraordinary 47% increase in both projects and rooms, YOY, standing at a record high of 125 projects/14,574 rooms. Projects in the early planning stage stand at 79 ...

Market Snapshot: Asia Pacific 2019

Hok Yean CHEE | November 11, 2019

By Hok Yean CHEE Transactions in Asia Pacific In 2018, transaction activity in Asia Pacific continued its strong momentum from 2017 and achieved transaction volume of approximately USD12.8 billion worth of hospitality assets, indicating a 26.6% increase year-on-year. From 4Q2018 to 3Q2019, transaction activity in Asia Pacific has slowed down. Despite the reduced transaction activity, growing interest in hospitality assets continue to be observed in regions such as Australia & New Zealand, India & Sri Lanka and specific markets in the North Asia and South-East Asia regions. For some markets, the slowdown can be attributed to vario...

U.S. Hotel Construction Pipeline Continues Its Year-Over-Year Growth

Lodging Econometrics (LE) | November 11, 2019

November 11, 2019 – PORTSMOUTH, NH – In its fall report, buoyed by a steady consumer-driven economy, analysts at Lodging Econometrics (LE) reported that the total U.S. construction pipeline stood at 5,704 projects/700,496 rooms, up 6% by projects and 8% by rooms year-over-year (YOY). Pipeline totals continue to climb closer to the all-time high of 5,883 projects/785,547 rooms reached in the second quarter of 2008, and are just 179 projects shy. In its eighth consecutive quarter of growth, projects currently under construction stand at 1,729 projects/235,278 rooms, the highest count recorded since the second quarter of 2008. Projects sc...

New York City Among the Top Hotel Construction Pipelines in the United States

Lodging Econometrics (LE) | November 8, 2019

November 8, 2019 – PORTSMOUTH, NH – In the most recent Lodging Econometrics (LE) Construction Pipeline Trend report on New York City, LE states that New York City has a total of 155 projects/26,605 rooms in the construction pipeline, one of the top three largest pipelines in the U.S. Of this total, hotels presently under construction are at 102 projects/17,504 rooms, projects scheduled to start construction in the next 12 months are at 23 projects/3,637 rooms, and those in early planning are at 30 projects/5,464 rooms. The three market tracts with the largest hotel construction pipelines are: Midtown South, the area between 24th and 36...

CEO Compensation in the Shrinking Casino Industry

Keith Kefgen | November 6, 2019

(November 6, 2019) - As the list of public gaming CEOs continues to shrink due to consolidation and the growing competition of technology-based options, "gaming" in its broadest sense will force any entertainment organization to consider a multi-segment strategy (think the NFL, FanDuel, DraftKings, and Jay-Z). The casino industry will be no different, as younger adults focus on their mobile device and skills-based gambling. Thus, the annual AETHOS list of public gaming CEOs has dropped to its lowest level since 2002, when AETHOS started to track their pay. Today, only 12 CEOs run traditional casino operations. Now in its 13th year of stud...

Discovering Possible Off-The-Radar Investment Markets

Drew Noecker | November 4, 2019

By Drew Noecker At the 2019 Phoenix Lodging Conference, the HVS Team heard muted optimism and a view that growth in the next 24 months may vary widely across markets. We would encourage owners to investigate the sometimes overlooked top 50 MSAs that still could experience value appreciation in those 24 months. Markets for Consideration Source: HVS Research and the HVI   HVS reviewed multiple metrics to identify select top 50 MSAs that might offer good value to hotel investors. While these markets don’t necessarily have the cachet of, say, New York or San Francisco, they do offer potential growth and may not carry the competitive sup...

Hotel Data Digest: Seasonality vs. Moving Average

HotStats | November 4, 2019

Tracking the evolution of key performance indicators (KPIs) over time allows hoteliers to identify meaningful trends, create forecasts and budgets and assess the results of different strategies. To perform this kind of analysis, data has to be recorded within consistent time intervals and in chronological order. This is known as a time series. For example, daily occupancy for the past month is a time series: data (occupancy) is recorded within a consistent time interval (daily) and is chronologically displayed. There are many ways of looking at a time series, depending on the kind of insights you want to extract from it. In this article, w...

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