;

HVS’ First U.S. Hotel Market Connections Proves a Success 750 Hospitality Professionals Convened in 12 Locations across the Country to Gain Local Market Knowledge and U.S. National Perspective

On Wednesday, May 1, 2013, HVS hosted its inaugural U.S. Hotel Market Connections, a series of concurrent hotel intelligence seminars held in 12 cities across the United States.

On Wednesday, May 1, 2013, HVS hosted its inaugural U.S. Hotel Market Connections, a series of concurrent hotel intelligence seminars held in 12 cities across the United States. The seminars delivered critical insights from a panel of local experts on issues facing the hospitality industry in that specific market. Issues included: trends in hotel lending and valuation; up-to-the-moment snapshots of hotel values, transactions, cap rates, and operating trends in each location; and a forecast of nationwide hotel values through 2016.

HVS Connections seminars were held in Atlanta, Chicago, Columbus, Dallas, Denver, Los Angeles, Minneapolis, New York, Orlando, Philadelphia, San Francisco, and Washington, D.C. with HVS Managing Directors from throughout the United States sharing their expertise and moderating the conversations.

“This has been one of the most successful first-time hospitality conferences and we are proud of our team for the synchronization, connectivity and most importantly, the local knowledge that was shared with our attendees,” comments Stephen Rushmore, Jr., President and Chief Executive Officer of HVS. “The interaction, questions, discussions and engagement in each of our Connections locations inspired us and we hope all participants gained new insight and affirmation about their hospitality investment decisions.”

Take-aways from the regional conversations included:

  • Despite the largest increase in supply in Manhattan history, occupancy for the 12-month period ending in March 2013 reached an all time high of 86.7%; Revpar growth will therefore be driven by average rate over the next few years, ranging from 5-6% annually.
  • Although the Washington, D.C. market is facing uncertainties related to the government sector, Connections participants agree that this is still a highly desirable, investment-grade city in which to own and operate hotels.
  • The Orlando market is experiencing a rebound and now is the time to buy hotels there while interest rates are at an all time low;
  • Silicon Valley and San Jose are strong secondary markets in the greater San Francisco area, where developers continue to search for hotel projects and where land is relatively more affordable for new construction;
  • Atlanta anticipates average rates to grow at above the rate of inflation for the next four years, due to limited planned new hotel supply;
  • In Dallas, hotel financing has focused on transactions and refinancing as lenders remain cautious about new hotel construction;
  • As of early 2013, equity interest in the lodging sector in Denver remains strong, and debt is increasingly available. Loan-to-value rations are rising and interest rate have declined to new lows, likely to attract more lodging investors and sellers to the market as the year moves ahead;
  • Strong mid week demand throughout the year, strong weekend demand during the summer and new upscale supply will allow average rate growth for the metro Minneapolis area to rise above inflationary levels for the next several years;
  • Average rate in Philadelphia is forecast to strengthen as hoteliers are continuing to renegotiate rates with corporate accounts;

From the national perspective, Rushmore shared data from the soon-to-be released 2012 HVS-STR Hotel Valuation Index forecasting “a boost in hotel values nationally in all 65 markets that we track, over the next four years.”

Summaries of the conversations held in all the Connections locations will be published by HVS and available to attendees shortly.

Contact:
Leora Halpern Lanz
Email: llanz@hvs.com