This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.  Find out more here  Close
5 things to know: 5 April 2013
April 5 2013
Highlights

• Starwood Hotels could sell up to $3b in assets
• TravelClick: Forward-looking occupancy, ADR show growth
• Owners pursue value as brands cut away old properties
• US hotel values reach highest point since June 2008
• Supertel’s portfolio evolution continues

Starwood Hotels & Resorts Worldwide could sell between $2 billion and $3 billion in assets during the next two to three years, according to a Bloomberg report.

“If markets continue to improve for the sale of hotel assets,” properties in North America, Latin America and Europe would be sold as Starwood Hotels continues to focus on its asset-light strategy, CEO Frits van Paasschen said.

The company is seeking to increase hotel-management revenue to 80% of the total; only 25% of total revenue was fees-based five years ago, the CEO said. Management fees comprise approximately 60% to 65% of total revenue today.

“Our balance sheet is very strong,” van Paasschen said. “As we generate cash either from ongoing operations or from the sale of additional real estate, that represents cash that can be returned to our shareholders” through increasing dividends or buying back shares, he said.


Committed occupancy for the hotel sector over the next 12 months is showing a 1.9% increase with average daily rate up 3.5%, according to TravelClick data.

“Looking forward, we see signs that occupancy and (ADR) growth will continue to be positive,” Tim Hart, executive VP at TravelClick, said in a news release. “However, there are signs of weakness in the group sector, as the pace of new group bookings continues to decline or flatten depending on the month. We believe this warrants a watchful eye.”

Other observations for the 12-month outlook comprising March 2013 to February 2014 include:

  • Group occupancy is up 1.7% with group ADR edging up by 0.8%.
  • Transient bookings are up 2.6%, while ADR is showing 5% growth.
  • Leisure demand is up 2.4% with ADR up 5.6%.
  • Business travel demand growth is 2.4% with ADR increasing 4.5%.


As brands update their prototypes and cut aging assets adrift, owners are pursuing a variety of avenues through which to extract value, reports HotelNewsNow.com’s Samantha Worgull.

The turnover has become more pronounced recently as the economy improves and franchisors introduce new layouts that no longer fit first generation Hampton Inn, Residence Inn by Marriott, Fairfield Inn & Suites and Courtyard by Marriott hotels, among others.

“We’re seeing it across the board,” Mike Cahill, CEO and founder of Hospitality Real Estate Counselors, said. “If it’s a really strong hotel market, the brands are going to be more aggressive about getting rid of the old (generation).”


U.S. hotel property values are at their highest level since June 2008, according to the Green Street Commercial Property Price Index.

The hotel CPPI increased by 2% to 79.97. U.S. Commercial property values overall increased by 2% during March and have now recovered the ground lost during the downturn and are back, on average, at 2007 levels.

“We’ve had modest economic growth, very low interest rates and minimal new building. That’s a good environment for property appreciation” Peter Rothemund, an analyst at Green Street Advisors, said in a news release. “And it looks like the upward momentum in values will continue. Real estate looks quite attractive relative to the yields that are available in the fixed-income market.”


When real estate investment trust Supertel Hospitality first began selling non-core hotels three-and-a-half years ago as part of an asset disposition program, it was easy to pick out the properties that would be better off sold, Director of Asset Management Judah Matthews said.

Those choices are not as easily made these days, Matthews said last month during a break at the 25th annual Hunter Hotel Conference.

“It’s getting to the point where those decisions on an asset-by-asset basis sometimes are getting more difficult,” he said. Still, he added the REIT is likely to remain a net seller of hotels during the coming 12 months.


Compiled by Shawn A. Turner.

COMMENTS   Show All
Login or enter a name   Post Your Comment  Check to follow this thread via email alerts (must be logged in)
(4000 characters max)

Comments that include links or URLs will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff

TRENDING
Millennial spend outpaces boomers, Gen X
Hoteliers diversify loyalty program offerings
Danziger plans to grow Hampshire by thousands
Crowded NYC hotel market poses challenges
Examining the US hotel industry: 1995 to 2014
LA’s wage hike: 8 things you might not know
VIDEO
US supply growth not a problem
Low supply, group biz boost hotel sector
HDC attendees discuss revenue strategies
Hotel Data Conference: Day Two in review
Hotel Data Conference: Day One in review
LATEST NEWS
US hotel openings list
Experience is the new amenity, panelists say
9 tips on how to handle the media
Boutiques overtake Las Vegas
Developing in Africa: Brand vs independents
Examining the US hotel industry: 1995 to 2014
Contact Us
Hotel News Now
18500 Lake Rd.
Suite 310
Rocky River, Ohio 44116
        
Copyright © 2004 - 2014 Hotel News Now, a division of STR, Inc. All Rights Reserved.   Privacy