The 2010 RevPAR recovery race is in the books. The winner? New Orleans. After a dismal 2009, the market posted an impressive 14.7% overall revenue per available room improvement for the year, according to the year-end review of the RevPAR Recovery Race series from STR Analytics’ Orly Ripmaster.
In addition to New Orleans, the only markets to achieve solid, double-digit RevPAR growth during 2010 were Boston, New York, Miami and Denver. In fact, when isolated from the remaining markets, these five markets achieved an average RevPAR growth of 12.4% while the remaining 21 markets only averaged 4.3%.
Conversely, the bottom five markets continued to struggle, including Tampa and Houston, which both still experienced RevPAR declines of -1.5% and -4.2%, respectively.
More than US$24 billion in hotel real estate traded hands globally during 2010, according to Jones Lang LaSalle Hotels.
The Americas region registered the most dramatic rise in 2010, with transaction volumes increasing five-fold to US$11.1 billion, driven by acquisitive real estate investment trusts and the US$3.9-billion purchase of Extended Stay Hotels. Europe, Middle East and Africa was the second most liquid region, experiencing a more than 110% jump in volumes to US$9.3 billion. Activity across Asia/Pacific edged upwards at a more moderated pace with total sales of US$3.9 billion, reflecting lower levels of leverage in the market and hence fewer distressed sales, along with a slowdown in deal pace in Japan.
Buoyed by the rebound of the United States economy and an increasing number of hotel assets that traded hands in 2010, the bears have reversed course in dramatic fashion as the overwhelming majority of hospitality executives now hold a bullish view of the marketplace for 2011, according to the DLA Piper Hospitality Outlook Survey.
Highlights of DLA Piper’s 2011 Hospitality Outlook Survey include:
- 88% of respondents describe their 12-month outlook for the U.S. hospitality industry as “bullish,” nearly tripling the bullish sentiment from 2010.
- 82% of respondents expect hotel asset values to rise during the next year, compared with only 20% of respondents in 2010.
- Nine out of 10 respondents believe market conditions have created good buying opportunities for well-capitalized investors, led by opportunities in the upscale and luxury sectors.
- Respondents expect REITs (51%) and private equity (40%) investors to dominate the U.S. hospitality investment landscape in 2011.
A total of 465 California hotels are in default or have been foreclosed on, according to Atlas Hospitality Group’s 2010 Year-End Distressed California Hotel Survey. The number of hotels foreclosed on continued to increase, while the number of hotels in default fell. The drop in defaults was due mainly to the Extended Stay of America restructure, which involved 109 California hotels.
Some other highlights:
- The number of foreclosed hotels increased 15.9% from the third quarter, from 119 to 138, and up 122% since the beginning of the year.
- The number of hotel rooms that have been foreclosed on was at 10,144, up 9.8% from the third quarter and up 127% since the beginning of the year.
- The largest hotel in the state to be foreclosed on in 2010 was the 512-room Holiday Inn in San Jose.
- Independent hotels accounted for 71% of the hotels foreclosed on.
Pestana Hotels & Resorts has hit the ground running in 2011. The Lisbon-based hotel owner and manager is on an aggressive growth track as it looks to contniue expanding throughout Europe and South America, according to a report from HotelNewsNow.com’s Stacey Higgins.
Pestana’s portfolio has 87 hotels with more than 9,000 beds in nine countries: Portugal, England, Brazil, Argentina, Venezuela, Mozambique, South Africa, Cape Verde and São Tomé e Príncipe.
In March, the 4-star and 5-star brand opened its first hotel in London—the 216-room Pestana Chelsea Bridge Hotel and Spa.
Compiled by Patrick Mayock.