HVS Publishes 2013 U.S. HVS-STR Hotel Valuation Index (HVI)

Three Florida Cities to see Largest Value Increases in 2013; U.S. Beginning to see Increases in Extended Stay and Select-Service Supply

HVS is pleased to announce the publication of the 2013 HVS-STR U.S. Hotel Valuation Index. Co-authored by HVS President and CEO Stephen Rushmore, Jr., and Consulting & Valuations Associates Katharina Kuehnle and Christian Buckhout, The Hotel Valuation Index (HVI) tracks hotel values in 66 individual U.S. markets and the United States as a whole. The HVI looks at hotel supply, demand, occupancy, and average rate trends for each market area and creates an income-and-expense projection based on local operating costs. Observations include:

  • Ranking first in 2012, with the most significant per-room value increase was Oahu, followed by San Francisco. Ranking last in 2011, with the most significant per-room decline was Washington, D.C. According to Kuehnle, “The lodging industry has experienced a 20% increase in value in 2012 compared to 2011 levels; the U.S. average change in per-room value equated to an increase of nearly $16,000. Continuous occupancy growth paired with strong projected average rate growth, are anticipated to result in relatively strong growth in net operating income (NOI).”

However, adds Buckhout, “it is uncertain just how much and how fast revenue will continue to climb in 2013. At the same time, we are beginning to see increases in supply, particularly in the extended-stay and select service segment.”

  • Three Florida cities -- Tampa, WPB-Boca Raton, and Miami -- are expected to capture the largest value growth in 2013. With record years for both domestic and international visitation (well surpassing New York City and Las Vegas) occupancy and average rate are expected to increase significantly this year.
  • According to this 2013 HVI, U.S. hotel value growth will persist through 2016, especially in secondary markets, surpassing 2006 values in 2013. However, U.S. value growth is projected to gradually slowdown through 2017.

Please click here to view the 2013 U.S. HVS-STR Hotel Valuation Index (HVI).

Leora Halpern Lanz
Tel: 516 248-8828 x 278