Message from Rod Clough, MAI, President, HVS Americas 

The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide. 

In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related restrictions will be in place, we are updating our analyses on a weekly basis using the most current data. 
 
Click here to read our latest reserach from around the world, which outlines our analysis of these critical factors.

If you’d like to speak to someone personally to review details of our most current analysis, please don’t hesitate to contact us directly.

In Partnership,
Rod Clough, MAI
President, HVS Americas

The Impact of COVID-19 on Hotel Values 
By Anne Lloyd-Jones, MAI, CRE, Suzanne Mellen, MAI, CRE, FRICS, ISHC and Tanya Pierson, MAI

The COVID-19 pandemic and the related restrictions on travel, business activity, and individual movement are having an unprecedented impact on our industry and economy. Hotel owners, operators, lenders, and investors are all facing greater challenges than ever anticipated, as they grapple with plummeting occupancy, average rate (ADR), and RevPAR and seek solutions to mitigate the impact on EBITDA.

Putting the Past to Use Redux - Expense Elasticity in a Downturn 
By Erich Baum

Reprising and updating a study from the last downturn, this article surveys operating expense elasticity in the industry’s most recent period of acute revenue loss, 2008–2009, using data presented across a range of product types and quality levels. The study is intended to help industry participants build or evaluate a forecast in a context of economic decline and provides a forecasting tool for the same.

HVS COVID-19 Impact on Lodging Tax Revenues 
By Thomas Hazinski and Joseph Hansel

Based on patterns of recovery following the two most recent recessions, HVS projected the lodging tax revenues of 24 U.S. urban markets. Compared to a baseline scenario without the pandemic, HVS estimates combined lodging tax losses across these markets could range from $4.0 to $5.5 billion. Losses of this magnitude will force stakeholders to consider steps such as debt refinancing or seeking alternative revenue streams until the hospitality industry recovers from this pandemic.

Reacción del Mercado Hotelero en Tiempos de Crisis 
By Richard Katzman, Patricia Badiuk and Lorea Arnoldi

En vista de la experiencia de HVS en México y en otros países del mundo, hemos querido preparar y distribuir este breve documento que proporciona algunos datos sobre el comportamiento del mercado hotelero de cara a eventos de shock como el que ahora vivimos. Queda claro que este evento no es igual a otros pasajes que se pueden analizar y que las circunstancias del evento actual cambian literalmente por hora.

HVS Hotel Transaction Activity: The Factors Influencing a Return to Normalcy in a Post-COVID-19 Time 
By Drew Noecker

As a result of the current COVID-19 pandemic, the HVS Team has received many questions about when U.S. hotel transaction volume will return to reasonable, pre-pandemic levels. While we do not have a definite answer, as this circumstances are evolving daily, we have tried to use past events to provide some insight on the factors that would affect a possible rebound.

Impact of COVID-19 on Los Angeles & Southern California Hotel Markets  
By Luigi Major, MAI

A record-breaking decade of growth in the hospitality space in Southern California has now been brought to a halt by COVID-19. This article explores the impact of the pandemic on Los Angeles and other major Southern California hotel markets.

HVS Brokerage & Advisory, Ten-X Closes Sale of SureStay Hotel by Best Western in Salina, KS 

HVS Brokerage & Advisory is pleased to announce that, in cooperation with Ten-X, it has closed on the auction and sale of the 100-key SureStay Hotel by Best Western, located at 1846 N 9th Street, Salina, Kansas 67401.

HVS Brokerage & Advisory Closes Sale of Quality Inn & Suites by the Parks in Kissimmee, Florida, to Sarasa Hotels Ltd. 

HVS Brokerage & Advisory announces the sale of the 113-key Quality Inn & Suites by the Parks, located at 2945 Entry Point Boulevard, Kissimmee, Florida 34747.

AVAILABLE OPPORTUNITY - Best Western Plus Lake Jackson Inn & Suites 

HVS, as the sole and exclusive advisory firm to Ownership, is pleased to present the opportunity to acquire the 64-key Best Western Plus Lake Jackson Inn & Suites, a limited-service asset located in Lake Jackson, Texas. Based on current pricing guidance, the Property is priced below replacement cost at $89,000 per key. To construct a similar limited-service asset with comparable amenities, the estimated all-in investment would be a minimum of $100,000 to $110,000 per key. Please visit our listings or contact Eric Guerrero, James Rebullida, or Fadi Rawashdeh for more information.

AVAILABLE OPPORTUNITY - Hampton Inn by Hilton Houston-Brookhollow 

HVS, as the sole and exclusive advisory firm to Ownership, is pleased to present the opportunity to acquire the 81-key Hampton Inn Houston Brookhollow, a recently renovated, limited-service asset located in the historically strong Houston Northwest Freeway submarket. The Property was under renovation from March 2018 to May 2019. Current ownership spent over $3.1M ($38k/key) to renovate all areas of the Property; thus, a minimal PIP would be expected for the new buyer. Please visit our listings or contact Eric Guerrero, James Rebullida, or Fadi Rawashdeh for more information.

AVAILABLE OPPORTUNITY - Holiday Inn Express & Suites Houston-Brookshire 

HVS, as the sole and exclusive advisory firm to Ownership, is pleased to present the opportunity to acquire the 75-key Holiday Inn Express & Suites Brookshire – Katy Freeway, a recently constructed, limited-service asset located in the historically strong Katy Freeway submarket. Based on current pricing guidance, the Property is priced significantly below replacement cost at $63,333 per key. The Holiday Inn Express & Suites was constructed in accordance with the newest IHG Formula Blue package. To construct a similar limited-service asset with comparable amenities, the estimated all-in investment would be a minimum of $110,000 to $130,000 per key. Please visit our listings or contact Eric Guerrero, James Rebullida, or Fadi Rawashdeh for more information.

AVAILABLE OPPORTUNITY - Best Western Oakdale Inn, Louisiana 

HVS, as the sole advisory firm to Ownership, is pleased to present the opportunity to acquire the 56-key Best Western Oakdale Inn, a recently renovated, limited-service asset. Given the excellent physical condition of the Property, a minimal change-of-ownership PIP is expected at $112,000 ($2,000 per key). Please visit our listings or contact Eric Guerrero, James Rebullida, or Fadi Rawashdeh for more information.

AVAILABLE OPPORTUNITY - Staybridge Suites Dallas-Bedford Development 

HVS, is pleased to present the opportunity to acquire the fee simple interest in a 1.34-acre site within the growing Bedford submarket of Dallas. The land is fully entitled to be developed as a 70-key Staybridge Suites hotel; an upscale, IHG-affiliated, extended-stay brand. Please visit our listings or contact Eric Guerrero or James Rebullida for more information.

AVAILABLE OPPORTUNITY - La Quinta Inn & Suites Houston NW-Beltway 8-West Road 

HVS, as the sole and exclusive advisory firm to Ownership, is pleased to present the opportunity to acquire the 72-key La Quinta Inn & Suites Houston NW-Beltway 8-West Road, limited-service asset located three Miles from 107-acre Grand National Business Park Development. Please visit our listings or contact Eric Guerrero, James Rebullida, or Fadi Rawashdeh for more information.

HVS in the News 

• Which Chicago hotels will flunk the COVID stress test? 
• Plunge in Convention Hotel Travel Puts Municipal Bonds at Risk
• Canadian hotel industry draws troubleshooters
• British Columbia's hotel industry cratered by virus
• Province’s hotel industry cratered by virus
• B.C. hotel industry sideswiped by virus outbreak
• Wisconsin Center's $425 million expansion delayed indefinitely by coronavirus pandemic's financial turmoil

Join HVS at Live Webinars 

• April 21, 2020: Hok Yean CHEE at Webinar: BCLP | HVS | HOFTEL - Part 1 - Hotel Valuations in the time of COVID-19 and Impact on Lending and Debt Restructuring - a novel response.