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A New Approach to Hotel Management Fees
Marcus R. Lee | April 26, 2024
By Marcus R. Lee In the ever-evolving hospitality industry, the question of how to effectively compensate hotel operators remains crucial. While the basic premise of paying managers for their management skills holds true, the prevalent incentive fee structures may no longer adequately align with market realities, particularly for owners. Management Fees Breakdown Hotel management companies earn fees through three main avenues: In the typical hotel management agreement, hotel management companies are typically paid a base fee equal to 2.0% to 4.0% of total operating revenue—3.0% being the most common—plus an incentive, typically an...
THE PLAYERS Championship’s Impact on Jacksonville Hotels in 2024
Angela Lahti | April 24, 2024
By Angela Lahti Each year, Ponte Vedra Beach in the greater Jacksonville, Florida, area hosts THE PLAYERS Championship at TPC Sawgrass. The event, often referred to as “golf’s fifth major,” is an annual tournament on the PGA Tour and offers the largest purse of any regular-season PGA Tour event. A University of North Florida study completed in 2015 estimated the total economic impact of the event in Duval and St. Johns counties at over $40 million. The 2024 edition, held March 11–17, marked the event’s 50th anniversary; a record-setting $25-million purse was offered, with $4.5 million claimed by this year’s winner, Sco...
HVS Las Vegas Casino and Hotel Market Outlook 2024
Shannon S. Okada | April 16, 2024
By Shannon S. Okada Las Vegas continues to evolve, with billions of dollars being spent on the development of new world-class venues in recent years. The market hosted 40.8 million visitors in 2023, exceeding the 40.0 million visitor threshold for the first time since 2019. Gaming revenue for Clark County in 2023 was $13.5 billion, which set a market record for the second straight year. In 2023, occupied room nights, as well as total occupancy (83.5%), continued to lag 2019 performance; however, like gaming revenue, the market’s ADR ($191.29) and RevPAR ($159.73) for 2023 reached record levels for the second year in a row. As Las Vegas l...
The Dynamic Demand Base Powering the Knoxville Lodging Market
Marc Greeley | April 8, 2024
By Marc Greeley Knoxville’s prime location, unique blend of attractions, academic institutions, and natural beauty has always made it a popular destination for tourists and business travelers. The city’s proximity to the Great Smoky Mountains National Park has benefited the market and region, as this is the most visited national park by a significant margin. Historically, the market mirrored many college towns, with a sturdy base of corporate demand fueled by businesses associated with and benefiting from the University of Tennessee, Knoxville. But over the last several years, growth at the university, the city’s location as a con...
2023 European Hotel Transactions
Matthias Hecht | April 4, 2024
By Matthias Hecht, Serena Yang, Gauthier Champlong Introduction High inflation and consequential rises in interest rates had major impacts on investment markets throughout 2023, including slowed hotel transaction activity in Europe. Reaching €10.7 billion overall[1] , total volume was 19% lower than in 2022, which represented the second lowest level of investment in the last decade. There were 6% fewer transactions than in 2022, indicating that the average price per room was also down in 2023. Source: HVS – London Office Total Transaction Volume Chart 1: Total Assets Average Price Per Room 2015-23 Source: HVS �...
Riding the CFO Roundabout: Securing Hospitality’s Financial Leadership Future
Bill Conn | April 4, 2024
By Bill Conn CFOs are on the move. Since 2022, the hospitality sector has witnessed a dramatic shift in its financial leadership environment. Data shows that during the first six months of 2023, 103 CFO (Chief Financial Officer) changes occurred in Fortune 1000 companies.[1] This number represents a 30% increase from the 79 changes in the same period in 2022. From a hospitality perspective, this CFO “carousel” and the high demand in 2023 for CFOs and other finance executives is unlike anything the industry has ever experienced. The demand for top talent has risen across all disciplines, but 2023 was definitely the year of the CFO. Sur...
High Cost of Borrowing Contributes to 19% Fall in European Hotel Transactions in 2023, Says HVS Report
HVS | April 3, 2024
03 April 2024, London: High inflation and interest rate rises had a major impact on the European hotel investment market last year, slowing transaction activity and taking volumes 19% lower than in 2022, the second lowest level of investment in the past decade, according to the HVS European Hotel Transaction Report from global hotel consultancy HVS London and its hotel brokerage arm HVS Hodges Ward Elliott. Transaction volume across Europe reached €10.7bn, with 388 hotels* changing hands – and an average price per hotel that was 9% lower than in the previous year, although significantly ahead of the transaction volume in the year...
HVS ANAROCK Hotels & Hospitality Overview, March 2024
Akash Datta | April 1, 2024
By Akash Datta, Dipti Mohan, Dhwani Gupta Read the latest edition of the HVS ANAROCK monthly industry update, Hotels & Hospitality Overview (H2O), for the key trends in the Indian hospitality industry. Key highlights include: India’s domestic air passenger traffic grew by nearly 5% year-on-year in February 2024. Nationwide hotel occupancy rate is nearing pre-pandemic levels, with key markets like Delhi, Mumbai, and Chennai reporting occupancy rates of more than 80% during the month. There was a notable year-on-year spike in average hotel rates across the country in February 2024, particularly in Delhi and Hyderabad, where...
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