HVS International Presents the 2005 United States Hotel Valuation Index

HVS International Presents the 2005 Hotel Valuation Index (HVI): An overview of the trends, transactions and hotel investment activity in 2004. The US Hotel Industry has Recovered Since 9/11.
  • An overview of the trends, transactions and hotel investment activity in 2004
  • US Hotel Industry has Recovered Since 9/11
Steve Rushmore, president and founder of HVS International, the leading global hospitality consulting and hotel appraisal firm, has announced the publication of the 2005 Hotel Valuation Index. The Hotel Valuation Index (HVI) tracks and discusses hotel values in each of the 46 major U.S. markets and the United States as a whole. Created in 1987 by HVS International, the HVI is derived from an income capitalization approach, utilizing market area data provided by Smith Travel Research (STR) and historical operational and capitalization rate information from HVS International’s extensive global experience in hotel feasibility studies and valuations. With this information, it is possible to determine historical hotel per-room values, as well as an indication of hotel value growth through 2006.  

"The United States HVI shows that per-room hotel values (expressed in dollars) increased on average by over 33% across the United States in 2004," according to Aaron Gumpenberger, who co-authored the document with Rushmore. "On average, per-room values in the United States increased by approximately $18,000 in 2004, and all but two of the 46 markets reviewed experienced increases in per-room value. This 2004 increase indicates that per-room values across the country have weathered the recent economic recession, and have returned to levels reminiscent of 2000. Even more telling is that the decline of capitalization and interest rates in the United States indicate continued favorable financing conditions for investors to re-finance or buy lodging facilities for the next two years."

An additional feature of the 2005 HVI is the presentation of a hotel investment analysis tool in identifying formidable markets to buy or build hotels, the Volatility Index, created by Steve Rushmore. "The Volatility Index is an analysis of the historical rates of per-room value changes for an individual market, explains Rushmore. "The Volatility Index determines the standard deviation in market per-room value changes since 1987, and divides this standard deviation by the overall average per-room value of a market during the same period. Markets with historically minimal changes in value (volatility) that are expected to record strong increases in per-room value demonstrate favorable market conditions to buy or build hotels."

The 2005 HVI also analyzes the investment activity of major single asset sales of more than $10 million since 2000. HVS International monitors hotel markets in order to collect information on hotel sales and trends. HVS’ comprehensive database contains information on hotel transactions that occurred in the United States from 1990 to the third quarter of 2005.

Since 1980, HVS International has provided financial and valuation consulting services for more than 10,000 hotels in all 50 states and more than 60 countries. Our professional staff of more than 150 industry specialists offers a wide range of services, including market feasibility studies, valuations, strategic analyses, development planning, and litigation support. Through our divisions and alliances, HVS supplies additional hotel consulting expertise. HVS databases contain comprehensive information on more than 30,000 hotel transactions, operating agreements, financial statements, and compensation information.

To purchase a copy of the 2005 Hotel Valuation Index, contact Joan Raffetto at 516-248-8828, ext. 231, or email jraffetto@hvsinternational.com. The fee is $75 for an electronic copy.

For more information, please contact:
Leora Halpern Lanz

# # #